Feeling of market, by Alberto Carbonell

Yesterday's session was marked for Martin Luther King's festivity that it favoured that economic references were not published. In this context the scant volatility went the tonic dominant. Nonetheless the Asian market is that which is generating several uncertainty factors that would be able to have its reflection on the market.

On one hand yesterday Moody’s lowered the rating to Hong Kong until Aa2 from Aa3 with stable perspective from negative. On the other hand, increase the uncertainties on the decrease of the flow from tourists to China as a result of a new outbreak of «Coronavirus» in China. Until now it was thought that this new outbreak was transmitted only of animals to human although over the past hours it has been confirmed that the contagion also can produce between human.

Returning to the update strictly economic, yesterday the IMF updated its worldwide growth predictions in the kick-start of the World Economic Forum that it began in Davos. The organisation esteem that the worldwide growth rates for the years 2019, 2020 and 2021 2.9% will be placed at, 3.3% and 3.4%, when dealing with 3%, 3.4% and 3.6% of the previous forecast. This reduction is produced as a result of the worst behaviour of some emerging economies, especially the India.

For the United States the forecast of growth for 2020 was reduced until 2% from 2.1%, for the European Union the reduction has been until 1.1% from 1.2% whereas for Germany the growth 1.1% is placed at for 2020 from 1.2% planned previously.

Lastly, emphasise that this early morning the Bank of Japan, in its monthly meeting, has maintained unaltered its monetary policy, putting in half-the above-mentioned once again the effectiveness of the ultraexpansive policies that they do not achieve reactivate the inflation. For today's session the most notable thing will be the publication of the index Zew in Germany and the Euro area.

Yesterday's market

GE

The prices to the production of December fell a - 0.2% YY, in line with the expected thing, and they grew 0.1% MM (0.2% esp).

JP

The BOXWOOD maintains its monetary policy without changes with types in the - 0.1%.

IMF

Trims predictions of worldwide economic growth at 2.9% (a tenth one less than in October), 3.3% in 2020 and 3.4% in 2021 (a tenth one less and two tenth less). Trims also accuracies of growth of Spain to 2% in 2019 (2 tenth worse) and at 1.6% in 2020 and 2021.

Foreign exchange market comment

Rafael Cortés

Today open with a certain feeling of risk off, the Asian stock exchanges register falls and also the IMF has lowered its overall growth predictions, currencies as the yen find a certain demand.

We have had tonight the meeting of Central Bank of Japan and just as was expected no change has not been produced, expect a recovery of the growth as a result of the implemented stimuli although expectations of inflation have been revised with a downward trend.

Today have details of activity in Germany (ZEW) and of employment in U.K which us will give but light on the possibility of that the Central Bank goes down the types on the 30th, the market already discounts a probability of 65% that it will do.

Short USDJPY 108.80 – TP 102 – SL 110.80.

Europe:

UK 10.30am unemployment rate ILO (Nov.).

GE 11.00am index Zew (Jan.).

EZ 11.00am index Zew (Jan.).

US:

No data.

Market summary