MARKET RESEARCH

Jan 27th Jan 31st

SPOTLIGHT
Japan's Annual Inflation Rate

PSI20 follows European negative trend

Last week, the PSI20 lost 1.13% to 6696.67 points. The index was not immune to the turbulence registered in global markets, and investors confidence in Portuguese economic recovery was not enough to counteract jitters that worlds economic growth may be slowing down. In debt markets, the Portuguese Government bonds yields showed a mixed trend: while for the 6-months term bond and for the 5-year term bonds the yields increased, to 0.78% and 4.03% respectively, the 10-year Portuguese Government Bonds yield decreased to 5.01%. On Thursday, data released by the European Commission showed that the confidence of Portuguese economic agents improved in January, with the indicator reaching a 5.5year high (99.6).

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INDEXES PERFORMANCE

European Indices under pressure

European equity markets were under pressure last week. The FTSE100 lost 0.61% and the DAX dropped 0.46%, while the CAC40 climbed 0.51%. However, the gains of the main French Stock Index were not enough to avoid the slide of the Europe's leading Blue-chip index for the Eurozone, the STOXX50 fell 0.02% on the week. The performance of the European Indices was hurt by concerns regarding the emerging-market currency crisis, the winding down of the Feds economic stimulus and after data showed an unexpected drop in euro inflation, reviving fears that the currency bloc may be slipping into deflation.

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CURRENCIES
Jan 27
EUR/USD EUR/CHF EUR/GBP EUR/JPY EUR/YUAN AUD/JPY
1.367 1.226 0.825 140.400 8.269 89.640

Jan 28
1.365 1.229 0.824 140.980 8.263 90.700

Jan 29
1.366 1.223 0.825 139.690 8.272 89.470

Jan 30
1.356 1.224 0.822 139.290 8.217 90.380

Jan 31
1.349 1.223 0.820 137.630 8.175 89.260

Wkly Chg
-1.38% -0.05% -1.18% -1.67% -1.18% 0.43%

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REFERENCE RATES
Jan 28 0.241% 0.301% 0.404% 0.569% 0.179% Jan 29 0.237% 0.300% 0.402% 0.566% 0.157% Jan 30 0.232% 0.298% 0.399% 0.562% 0.155% Jan 31 0.230% 0.296% 0.396% 0.559% 0.228%

Asian currencies continue to decline

Asian currencies declined for a third week, led by the Thai baht and Malaysias ringgit, amid concern a slowdown in China and U.S. stimulus cuts will deepen the selloff in developing countries. Emerging-market stocks extended their worst start to a year since 2008, and declined as signs of a Chinese slowdown and worse-than-estimated Russian economic data bolstered concern the global recovery will falter. Chinas manufacturing sector contracted this month, with the Markit/HSBC PMI falling to 49.5 in January from 50.5 in December, its lowest level in 6 months. Japan's annual inflation rate rose to 1.6% and retail sales increased 2.6% (YoY) in December, below expectations of a 3.9% rise. The yen climbed against the dollar for its biggest monthly advance since 2012. Australias 10-year yield reached its lowest level since October, 3.99%.

Jan 27 Euribor 1M Euribor 3M Euribor 6M Euribor 12M Eonia 0.239% 0.300% 0.404% 0.569% 0.188%

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BOND YIELDS
Jan 27 Portugal 6M Portugal 5Y Portugal 10Y Spain 10Y France 10Y Italy 10Y Germany 10Y UK 10Y 0.615% 3.694% 5.049% 3.763% 2.365% 3.907% 1.671% 2.784% Jan 28 0.620% 3.638% 4.946% 3.697% 2.365% 3.859% 1.677% 2.796% Jan 29 0.782% 4.201% 5.118% 3.715% 2.351% 3.867% 1.644% 2.758% Jan 30 0.817% 4.126% 5.106% 3.716% 2.306% 3.839% 1.619% 2.751% Jan 31 0.779% 4.025% 5.008% 3.661% 2.229% 3.770% 1.660% 2.720%

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SPOTLIGHT
U.S. Pending Home Sales Growth Rate (MoM)

Volatile U.S. stocks continue to fall

U.S. stocks finished the week registering high volatility and more losses. The catalysts that drove the DJIA and the S&P 500 to their worst monthly performances since May 2012 seem to have not gone away. Fed decision, on Wednesday, to continue tapering, wiped off the better than expected quarterly earnings from big companies, such as D.R. Horton, Pfizer and Facebook. On the economic front, sales of new U.S. homes decreased 7% to a 414.000 annualized pace in December. Moreover, pending home sales index fell to 92.4 in December, from a downwardly revised 101.2 level in the previous month, the lowest level since October 2011. U.S. consumer confidence climbed to a 5-month high of 80.7 in January. In December this figure was 77.5 and analysts had expected it to rise to 78.1. Besides, companies seem to be less sure than households that the U.S. economy is strengthening, as orders for U.S. durable goods unexpectedly dropped 4.3%. Lastly, U.S. GDP rose 3.2% at an annualized rate in Q4, in line with consensus estimates, official data showed on Thursday.

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INDEXES PERFORMANCE
Jan 27
S&P 500 DJIA NQ 100 S&P Lac 40
1.781,56 15.837,88 3.509,02 3.318,95

Jan 28
1.792,50 15.928,56 3.505,72 3.322,85

Jan 29
1.774,20 15.738,79 3.467,82 3.267,27

Jan 30
1.794,19 15.848,61 3.532,41 3.291,27

Jan 31
1.782,59 15.698,85 3.521,92 3.286,39

Wkly Chg
-0,43% -1,14% -0,55% -1,07%

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CURRENCIES
Jan 27
USD/JPY USD/YUAN AUD/USD GBP/USD USD/CHF USD/CAD
102,670 6,048 0,873 1,657 0,896 1,112

Jan 28
103,250 6,051 0,879 1,657 0,900 1,115

Jan 29
102,280 6,056 0,875 1,656 0,895 1,118

Jan 30
102,750 6,061 0,880 1,650 0,903 1,116

Jan 31
102,020 6,061 0,875 1,644 0,906 1,113

Wkly Chg
-0,31% -0,68% 0,79% -0,27% 1,34% 0,36%

Brazil unemployment rate falls again

Retail sales in Argentina grew at a slower pace in December amid rising interest rates and an uncertain economic outlook. Economic activity in Mexico fell more than expected last month, while the trade balance rose more than expected in the same period. Moreover, Mexico's central bank kept interest rates on hold at a record low of 3.5%. Outstanding loans in Brazil's banking system rose 2.4% (MoM) in December, while Brazils debt-to-GDP ratio rose less than expected Lastly, Brazils unemployment rate fell to a record low 4.3% in December, from an already low 4.6% in November.

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COMMODITIES
0,60% -5,68% -1,46% 1,20%
Crude Oil WTI Natural Gas Crude Oil Brent Corn

-2,02% -3,78% -2,21% 2,90%

Gold Silver Copper Sugar

Natural Gas falls on mild weather forecasts.

WTI crude fell from the highest level of 2014 on concern that developing economies may shrink. Natural gas also fell as forecasts for milder weather in February signaled reduced demand for heating fuel. Gold followed the same trend after an upbeat report on U.S. consumer sentiment sparked demand for the dollar. On the other hand Sugar futures soared as record-high temperatures triggered supply concerns in Brazil, the worlds top producer.

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US TREASUR Y YIELDS
US 3M US 1Y US 10 Y US 30 Y Jan 27 0.053% 0.017% 2.750% 3.667% Jan 28 0.051% 0.104% 2.752% 3.674% Jan 29 0.046% 0.099% 2.679% 3.618% Jan 30 0.020% 0.094% 2.697% 3.637% Jan 31 0.020% 0.091% 2.644% 3.599%

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Ana Santos

David Novo

Jos Silva

Pedro Santos

Pratik Ashok

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