GLOBAL OUTLOOK ECONOMY & FINANCIAL MARKETS
Andbank’s Monthly Corporate Review March 2016
ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Contents Executive Summary
3
This month’s news in charts
4
Country Pages USA
5
Europe
6
China
7
India
8
Japan
9
Mexico
10
Argentina
11
Equity Markets Fundamental Assessment
12
Short-term Assessment. Risk-off shift probability
12
Technical Analysis. Main indices
12
Fixed Income Markets Fixed Income, Core Countries
13
Fixed Income, European Peripherals
13
Fixed Income, Corporate Bonds
14
Fixed Income, Emerging Markets
14
Commodities
15
Forex
17
Summary Table of Expected Financial Market Performance
18
Monthly Tactical Asset Allocation Proposal
19
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ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Executive Summary USA - The falls in financial markets and the tightening of US financial conditions, have raised questions about the outlook for US growth. However, under our core scenario, the recent turmoil should not deteriorate into a full-blown financial crisis. After a big chunk of companies have reported their 4Q15 results, we have revisited the closing figures for 2015 sales and EPS (which are our starting points for the purpose of our estimates). Sales per share and EPS in 2015 closed a bit lower than our initial overall assumptions. We have decided to cut expected sales growth to 4.6% (from 4.9%) but we are keeping net margins at 9.7%. We have also cut our trailing PE ratio projected to year-end to 17x (our previous PE estimate of 18.5 was not intended to set a target price, but was more a stress test exercise to show under what conditions the S&P could show positive returns. According to this, the S&P shows no significant potential appreciation from current levels. We have revised down our target for the T10y yield (from 2.7% to 2.5%) and we are raising our target for the USHYCDX index from 400 to 450. Europe - More stimulus from the ECB is widely expected. Activity surveys (both manufacturing and service PMIs) point towards a loss of momentum in the economy. Macro surprises have collapsed and new GDP projections are lower (GDP estimates have been slightly revised downwards, but could be cut further). With 35% of companies having released 4Q15 results, we can now revisit the closing 2015 sales and EPS levels. Both have come in at much lower levels and this will affect our estimated target prices. We are maintaining our projected growth in 2016 sales (3.5%) but slightly reducing our estimates for net margin (to 7.7%) and PE ratio (to 15x from 16,7). Despite this, there is still a near double-digit upward potential for the European indices. We have revised down our target for the Bund10y yield (from 0.7% to 0.6%), and raised our targets for the Itraxx Xover (HY) to 360 from 290, and the Itraxx IG to 85 from 65. We are raising our target for the Portuguese bond (from 2% to 2.5%). China - Global investors are increasingly downbeat about the outlook for China. However, there are reasons to believe that the pessimism is too extreme. The proxies for growth suggest that activity has been fairly stable since 3Q15. Outlook: With policy support building, a rebound in growth looks more likely in the near term than the further deceleration many are expecting. With projected sales growth of 7% (a conservative estimate), net margin for 2016 exactly the same as for 2015 (8.8%) and a projected PE ratio at around the recently seen lows (13x), the Shanghai Composite could still provide a 12% potential appreciation. India – This economy has got its inflation under control. As a result, the repo rate and the government bond yield have fallen by more than 100bp in the last 12 months, which has helped to keep GDP growth rate at the 7.4% level. India has reaped a nice dividend from the oil price collapse resulting in a much improved external position. Foreign investment is accelerating (+18% in the nine months to September). Analysts remain optimistic about a comprehensive banking clean-up. Japan - Any doubts about the capacity of the QE policy is always going to have a magnified impact on financial markets. In that regard, any sustained strength in the JPY will force the BoJ to double its efforts. The latest shift towards negative rates has been interpreted by the market as Kuroda making a desperate gamble once the BoJ’s QE had run up against its key limits. Japan’s GDP contracted by a worse than expected -1.4% saar in 4Q15. Mexico - Mexico is responding to market turmoil and the central bank decided to hike its reference rate by 50 basis in an extraordinary meeting. The finance ministry announced a 132 billion pesos cut on 2016 expending. Despite the market turmoil, the main equity index in Mexico has held up very well YTD (the only one showing price gains). We still expect further appreciation. The economy remains in a relatively good shape Argentina - We continue to see progress in key areas (Reforms & Holdouts). On February 5th, Argentina presented an offer to settle debt with holdouts. US Judge Griesa issued an order on February 19th saying that he will lift the paripassu injunctions subject to a series of conditions. Although some issues remain unresolved, this is an enormous step in the path to regain access to international markets.
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ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
The month in charts… and other curiosities
Libor-OIS spread (Overnight Index Swap)
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ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
USA:
We do not subscribe to the view of a 2008 style sell-off.
Do you feel dizzy?
Fed In the bank lending sector, there are indications that banks are tightening their terms and standards for at least a subset of businesses seeking commercial and industrial loans. The Fed’s minutes of the Jan 26-27 committee indicated that Fed officials interpreted recent events as a “tightening” of financial conditions in the US. As a consequence, we are pushing back our view of a Fed rate hike from June to September and we continue to expect a total of two rate hikes in 2016. Economy US GDP growth slowed noticeably in Q42015, declining from 2% in Q3 to 0.7% (due to temporary factors such as a major reduction in the rate of building stock and a fall in demand for heating in response to very mild seasonal weather). The falls in financial markets and the tightening of US financial conditions have raised questions about the outlook for US growth. However, under our core scenario, the recent turmoil will not deteriorate into a full-blown financial crisis. Why do we feel moderately optimistic? (1) Most of the adjustments to stock levels are over. (2) The negative impact on investments from the drop in oil prices should diminish as we expect prices to stabilize. (3) A positive impact on consumption from cheap oil should become more significant. (4) Employment and growth in household income remain favorable. (5) The savings ratio rose to a surprising level by the end of 2015. (6) Moreover, the upturn in the housing market should continue. (7) Budget policy will turn slightly more expansionary this year. (8) The banks started a race to provision their energy loan exposure in January. (9) We can reasonably expect banks’ derivatives portfolios to hold in an environment in which the oil shock stabilizes. We now see 2016 GDP at around 2% and for now are ruling out a marked decline in the pace of GDP. We see 2016 CPI at 1.5% y/y, with unemployment remaining near the recent lows (5%) Financial Markets Equity markets have experienced one of the largest YTD falls in history. Currency markets have also seen major disruption and spreads on high-yield corporate bonds have widened sharply. Many investors are wondering whether the market is telling us something –which in our experience it usually does– but that something is not always correct. In fact, the market has predicted 10 of the last 16 recessions, but it still cannot be ignored. Based on the aforementioned 9 points, it does not look as if the US economy is entering a recession. The corporate sector can buyback 7%-8% of market cap in shares (See chart 1). The catalysts needed to push the market higher are: (1) A stabilization in oil. (2) China being able to control its capital flight, and (3) US HY primary market to 5 operate properly.
ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Europe:
More stimulus expected. Will Mario disappoint again?
Does this makes sense?
ECB More stimulus is largely expected (another depo rate cut of 10bp, more collateral or a widening of the QE through larger purchases and new eligible assets). The purchase of bank senior debt, though not discarded, is still controversial. This would undoubtedly have a huge short-term impact in terms of tackling the turmoil surrounding European banks. With regards to the chances for additional ECB action: (1) Draghi’s comments in January. (2) Projected inflation at historical lows. (3) Macro surprises collapsing since December and activity surveys (manufacturing and services) pointing to a loss of momentum, and (4) Widening credit spreads suggest that we will see an increase in the intensity of the ECB’s policy. Politics • Spain: Situation remains uncertain under a hypothesis of potential new elections. Spanish bonds vulnerable. • Portugal: Budget proposal was approved by the European Parliament. Risk remains regarding rating reviews by Fitch and DBRS (the latter being more important as it is the only rating agency that holds an investment grade opinion on the country and thus makes Portuguese bonds eligible for QE purchases). • UK: The key issue is the 23rd June Brexit referendum. There are several aspects in favor of a bet on Brexit: (1) The refugee crisis. (2) German-inspired austerity. (3) Bankruptcy in Greece. (4) The pound is now as cheap as in the darkest days of the global financial crisis due to uncertainty ahead of the vote, and (5) populism also on the rise in the UK, etc. • Polls show roughly 50% support for Brexit, but public opinion may move even further with increasing support for the idea of Brexit as Eurosceptics ridicule Britain’s new deal agreed at the EU summit on February 19. • On the other hand, and according to our sources, we can find compelling reasons to think that British voters will ultimately back EU membership: (1) The interaction between the In-Out question and economic turmoil. (2) Until now Cameron and Britain’s leaders could not seriously defend staying in the EU (they had to pretend that they would contemplate a breakup if the EU rejected their demands). Under these circumstances, the “Out” lobby has enjoyed a virtual monopoly on public attention, but despite this political imbalance they have barely managed to gain 50% of public opinion. Having been offered the freedom to “vote with their conscience” on the EU deal, most significant conservative politicians –with the exception of Boris Johnson and Michael Gove– have come around to supporting Cameron. • The benefits of being a member of the EU outweigh the benefits of leaving. Therefore, and as the economic debate takes place, we believe that public opinion will favor remaining.
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ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
China:
Equity prices in China do not reflect economic fundamentals
UK banks creating close ties with Chinese markets
The state of the nation: There has been an inept response by China’s policymakers to the pressures of the last few months: (1) Misguided efforts to prop up equity prices, and (2) Poor communication of shifts in currency policy. This has weakened investor confidence in Chinese markets (see chart 1) and probably in the authorities’ ability to handle the structural transition China faces in the years ahead. Nevertheless, equity prices in China do not reflect economic fundamentals. The notion that the collapse in equity prices last year was driven by weakening economic conditions cannot be reconciled with the fact that the Shanghai Composite is up about one third from its mid-2014 position. Similarly, movements in equity prices have little impact on economic activity in China (there is no evidence of a “wealth effect” in consumer spending. In fact, real retail sales seem to have grown. Remember that 1 in every 30 people in China owns shares). Thus if the equity market does not have much significance for China’s economy, why should it matter to the rest of the world? However, many of the concerns about China over the past year have been driven by movements in an equity market that has very little to do with how the economy is performing. In fact, our local sources point out that there is little evidence that the economy is currently experiencing a hard landing as many believe. In short, China is growing at a slower pace (even slower than the official figures suggest) but it is not collapsing and recent data suggests a stabilization or even an acceleration. And this is true whether we focus on lowprofile measures of Chinese activity, trading partners’ export figures or the labor market (which you would expect to weaken if the economy was in deep trouble). Outlook Global investors have become increasingly downbeat about the outlook for China. However, there are reasons to believe that this pessimism is overblown. One of the problems is the lack of trust in official GDP data. We therefore focus on the GDP proxies used by independent research firms, which are based on a variety of indicators that are less likely to be manipulated. According to these proxies, growth is slower than the official numbers show and, although there was an abrupt slowdown in 1H2015, growth has been fairly stable since then. With policy support building, a rebound in growth looks more likely in the near term than the further deceleration many are expecting: (1) Policy has been loosened, and further loosening is expected. (2) Fiscal spending has picked up sharply. (3) The latest credit data suggest that monetary easing is also making an impact. The challenges Make it easier for the private sector to compete with State-owned firms. The need to channel credit to a more efficient 7 borrowers.
ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
India:
Analysts remain optimistic about a comprehensive banking clean-up
The SSE has already reflected the fall in intermediation
The SSE has already reflected the fall in intermediation
The state of the nation: India has brought inflation under control. As a result, the repo rate declined sharply in 2015 (from 7.75% to 6.75%), which has helped to keep GDP growth at the 7.4% level, while the Government bond yield has fallen by 110 bp in 18 months (from 8.86% to 7.85%). India has reaped a nice dividend from the oil price collapse resulting in a much improved external position. For first time in almost 8 quarters, the net external trade account is contributing positively to GDP (+0.52% in the +7,3% real GDP growth seen in 2015). Capital investment (GFCF) ground to a halt in 4Q15 (from 8.9bn IDR to 8.6bn IDR), but is still the second highest figure in 5 years. Credit has been accelerating since October, recording +11% y/y in January (up from 8.81% in October) Foreign investment was up +18% in the nine months to September. Reforms Although the pro-growth majority government of Narendra Modi has been generally competent and cut red tape, it has not delivered any “big bang” reforms yet. Much more is expected in this area. Hurdles The banking system (which is still the main source of financing) remains dysfunctional due to a “bad debt problem” at the big banks (public banks that account for 70% of banking system assets). They have seen their stressed loans ratio increase compared to last year to an official 11.3%. Even the private banks have hidden balance sheet problems (RBI). On the positive side, our sources indicate that the NPL rate has dramatically slowed in 2015, with “the RBI drawing a line in the sand”, giving banks a deadline of March 2017 to solve their problematic loans, which means that the flow of news from the banking sector will deteriorate in the coming months (as they become forced to recognize bad debts). How they will tackle the debt problem? To date, the route has been dependent on the hope that economic growth would ease this problem (hence the stockpile of restructured loans with rescheduled payments and extended maturities). However, this “extend and pretend” strategy has not yielded good results (since it has not improved the asset quality). (1) The focus (according to our sources) seems to be repossession (the lender obtains the collateral from the party with possession without invoking court proceedings and the collateral may then be sold). (2) Another restructuring scheme (championed by the RBI) is to allow banks to accept debt-to-equity swaps as part of a turnaround plan (banks will receive equity from debtor companies). (3) The government has promised to play its part in recapitalizing the publicly controlled banks. If successful, this would ensure more protection for lenders while giving bad debtors less room to hide (as is now the case). The bankruptcy resolution process could be reduced to six months, from a typical four years.
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ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Japan: A new shift to negative rates. Is the BoJ near a point of no return? Markets Why is the Japanese market one of the most volatile? Monetary stimulus seeks to drive economic growth through (1) wealth effect, (2) a competitive yen, and (3) improved corporate profits. These three forces were expected to be self-sustaining, hence any doubts about the capacity of this policy are always going to have a magnified impact on financial markets. Economy Japan’s GDP contracted by a worse than expected 1.4% saar in 4Q15. BoJ It now seems clear that the BoJ’s bid to revive the economy and push inflation up to 2% was always “ambitious”, if not impossible. Japan’s economy has serious structural headwinds (it looses around 1% of its working age population every year). The benefits delivered from BoJ’s policy easing has been in the form of (1) “super-charged” corporate profits from a weaker Yen, (2) higher labor force participation, and (3) a return to nominal growth, which resulted in a partial retreat of Japan’s deflationary mindset (private sector started to spend and invest to some extent). The latest shift towards negative rates has been interpreted by investors as a “whatever it takes” signal (although negative rates only apply to new reserves held by banks). The message received by the market was that Kuroda was taking a desperate gamble after the BoJ’s QE ran up against its key limits. Long term outlook The BoJ is at a point of no return. Any sustained strength in the JPY (its current strength was last seen in the immediate aftermath of the BoJ’s 2014 move to step up its QE) is likely to cause a downturn in earnings and soft wage negotiations leading to fading inflation expectations. As a result, the BoJ must double its efforts to encourage banks to put their reserves to work in the real economy (or into higher yielding financial assets). How? By further decreasing rates (of reserves) and crowding out private players from the government bond markets, forcing banks, insurers, pension funds and individuals into higher yielding but also riskier financial assets. From the private agents’ perspective, trading stable income for capital gains in “uncertain” markets is an unattractive proposition. The BoJ is therefore building a house of cards in asset prices. If the JGB bubble eventually bursts, the BoJ will not be in a position to fulfill its role as buyer of last resort for the simple reason that it will be the only one holding the majority of the assets. If the market increasingly takes this view that the BoJ’s policy is reaching an “all or nothing” point of no return, it will cease to give the BoJ the benefit of the doubt. Remember this: Abenomics is a confidence game, and confidence may crumble when the game reaches its limit. 9
ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Mexico:
Mexico responds to market turmoil Politics, Fiscal Issues and Reforms Today’s decision to raise interest rates by 50bp to 3.75%, the introduction of a policy of direct intervention in the FX market and the announcement of fresh budget cuts represents a combined effort by Mexico’s central bank and government to ease pressure on the peso. However, stabilizing the currency over the longer term will ultimately depend on whether oil prices bottom out and sentiment towards emerging markets improves. The rise in rates does not appear to be the start of a cycle of hikes. Instead it seems that the central bank has decided to bring forward rate rises that were already expected. Policymakers also decided to end the rules-based approach –selling $200mn in foreign currency for every 1% fall in the peso– and replace this with direct intervention in the FX market on a discretionary basis (giving greater scope to respond in times of heightened market volatility). The third measure is a fresh round of budget cuts. Spending will be cut by 0.7% of GDP this year (on top of the cuts previously scheduled for this year of 0.5% of GDP). Most of the pain will fall on state-owned company Pemex, insulating consumers from the worst effects of this fiscal squeeze (although the impact on investment will ensure that mining output continues to contract). The goal is to adjust public finances to the latest drop in oil prices (oil accounts for around 30% of government revenues) but also to head off potential increases in inflation derived from the drop in the peso. On the negative side, some of these measures (the rise in rates) will hamper growth, which could fall below the consensus of 2.7% this year. Financial Markets FX. We keep our 2016 estimate at 17.50. Fixed Income. Given the flattening curve following Banxico’s decision, we are keeping a M10-T10 spread of between 400-425 basis points for 2016. For the M10 we are holding our 6.5% target, with a Sell recommendation at 6.30%, while for USD sovereign debt we maintain our view of 4.40% for UMS10. Equity. All eyes are focused on China and the US. Concerns about global growth deceleration and corporate indebtedness in China have been key drivers in commodity price adjustments. Latin American economies remain subject to deceleration as crude oil prices have fallen by more than 65% over the past 18 months. But Mexico is not among the most exposed economies to China’s deceleration. Mexico will remain closely linked to the US (as the US receives 80% of Mexico’s exports). The consumption sector will continue its recovery, at least during 1H15. We also like selected airports and banking sector stocks. We prefer companies with high exposure to USD-denominated revenue. We estimate 4Q15 sales growth between 6% to 8%; net income would be positive on the back of FX depreciation. Target for the IPC circa 48,000.
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ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Argentina
We continue to see progress in key areas (reforms & holdouts)
Fathom Consulting expects GDP to rise to around 2% in 2017
NPL at just 1.9% of total
Current situation After the clamp removal, the subsequent demand for dollars by private individuals, the increasing number of companies sending dividends abroad, and importers that pay arrears, are all putting downward pressure on the peso (which depreciated from 13 to 15). Consensus is for the peso to be set in the 16.5–18 range. Although this trend could change in April once the new harvest season brings more dollars into the country, and a settlement with holdouts could also ease pressures on the FX market, we think that the USD inflows will be insufficient to finance FX requirements. We believe an FX level of 17.5 is appropriate. BCRA The monetary base expansion decelerated in January (from 40.6% to 32.8% y/y). Reforms On February 1, the Regulatory Authority (ENRE) announced the new tariff scheme for electricity distributors in the Metropolitan Area of Buenos Aires. In the case of Edenor, variable charges will rise between 467% and 967% (affecting 90% of customers) and fixed charges between 204% and 404%. Holdouts On February 5, Argentina presented an offer to settle debt with holdouts to pay claims with a 27.5-30% discount to the judge’s ruling (350% of nominal for holdouts that went to trial, and 150% of nominal to holdouts that did not). Several funds have already accepted the offer. Argentina asked US Judge Griesa to lift the injunction blocking payment of exchange debt, who subsequently issued an order on February 19 stating that he will lift the pari passu injunctions subject to a series of conditions: 1) The Court of Appeals remands the case to allow him to do so. 2) Argentina repeals the two laws that prohibit the Government from settling with holdout creditors. 3) Argentina makes full payments to all holdouts that agree to settle before February 29. This is an enormous step on the path to regain access to international markets, although some issues remain unresolved: Griesa’s order does not prevent nonparticipating holdouts from seeking alternatives to collect on their judgements. This means that an agreement with all of them would still be required to regain full access to credit markets, and just 14% of lead pari passu holdouts had accepted the February 5 proposal, with Argentina having made a “take it or leave it” offer. This indicates that negotiations with this group of creditors could be tough. Financial Markets In the next few months we expect Argentina to issue large amounts of debt, so there will be a lot of supply pressure in the debt market. We advise waiting to see the conditions to evaluate the attractiveness. We still like Bonars (17, 18 and 24), the YPFAR 2025, and Prov of BA (21 and 18).
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ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Equity Markets GLOBAL EQUITY INDICES - FUNDAMENTAL ASSESSMENT:
Index
Sales per Share 2015
S&P 500 INDEX/d 1.130
Andbank's Sales Andbank's Net Margin Sales Growth per Share Net Margin 2015 2016 2016 2016
EPS 2015
EPS 2016
EPS Growth PE ltm PE ltm 2016 2015 2016
117,6
10,4%
4,6%
1.182
9,7%
115
-2,5%
301
22,1
7,4%
3,5%
311
7,7%
24
8,3%
14,93 15,00
IBEX 35 INDEX/d 7.875
641,4
8,1%
0,2%
7.886
8,1%
639
-0,4%
13,05 14,00
MXSE IPC GRAL /d28.542
1.888,1
6,6%
7,7%
30.739
7,3%
2.244
18,8%
23,02 21,30
BVSP BOVESPA I/d 55.578
3.377,2
6,1%
5,5%
58.635
6,5%
3.811
12,9%
12,32 13,12
NIKKEI 225 INDEX20.408
1.018,6
5,0%
2,0%
20.816
5,0%
1.041
2,2%
15,73 15,80 11,49 13,00
STXE 600 PR/d
16,57 17,00
SSE COMPOSITE/d2.652
233,9
8,8%
7,0%
2.838
8,8%
250
6,8%
HANG SENG INDE/d 13.064
2.015,3
15,4%
2,0%
13.325
15,4%
2.052
1,8%
9,48
S&P SENSEX/d
12.559
1.432,9
11,4%
11,0%
13.941
11,8%
1.645
14,8%
16,05 17,00
MSCI EM ASIA
411
34,1
8,3%
7,0%
440
8,3%
37
7,0%
18,15 18,21
10,00
INDEX CURRENT PRICE 1.948 330 8.367 43.473 41.593 16.027 2.688 19.112 23.002 619
ANDBANK ESTIMATES
RISK-OFF SHIFT PROBABILITY:
Andbank's Global Equity Market Composite Indicator (Breakdown)
Buy signals Positive Bias Neutral Negative Bias Sell signals FINAL VALUATION
Previous
Current
Month
Month
8 7 4 2 1 4,3
12 2 6 0 2 5,0
2016 2016 TARGET E[Perform.] PRICE % Ch Y/Y 1.949 0,1% 360 8,9% 8.943 6,9% 47.797 9,9% 50.000 20,2% 16.445 2,6% 3.247 20,8% 20.521 7,4% 27.965 21,6% 665 7,4%
Andbank’s Global Equity Market Composite Indicator Preliminary assessment of the level of stress in markets
0
-5
-10 Market is Overbought
+5
Area of Neutrality Sell bias
Buy bias
+10 Market is Oversold
o Score. Our Andbank GEM composite indicator has shifted from 4.3 to 5 in a -10/+10 range, suggesting that the market remains slightly oversold, although the level of stress is not yet extreme (not extremely oversold). We therefore consider that the market is cheap but not extremely cheap. At current levels, the continuity of the risk-off shift in the equity markets would mean that the market would quickly become heavily oversold. o Positioning (speculators, HF, managers): investors are significantly less confident (BofA ML Fund Manager Survey for February). Allocations to equities have fallen sharply –although not yet to UW-, cash holdings have risen to 5.5% (3rd highest reading since 2009) with almost 40% of managers being OW cash. Macro HF with defensive betas, and put/call ratio remains high. o Flows (Funds & ETFs): Outflows close to “capitulation” levels in the past 7 weeks ($53bn). Higher than the $36bn seen in August 2015. Despite a recent rebound, outflows continue. o Sentiment: BNP love/panic index is at lowest ever level. Ned Davis indicator shows extreme pessimism, and CTA Advisors & Managers Surveys rallied down (betting against the crowd is a bullish position). The percentage of NYSE stocks closing above the 200 day moving average remains very low (22%).
TECHNICAL ANALISYS (2016 view): o S&P: LATERAL. In our central scenario, the index will move within the lateral channel (1,814-2,134). o STOXX50: We no longer think that the index will trade above the key 2,789 level in our central scenario. We now contemplate a side channel (2,600-3,300) o IBEX 35: Our central scenario is now less positive. New range is 7,500-9,200 for 2016.
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ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Fixed Income – Core Country Bonds:
NEGATIVE STANCE
UST 10Yr BOND: Entry point above 2.5% yield // Floor at 1.92%. Ceiling 2.98% 1. Swap spread: Swap rates fell sharply to 1.61 (from 1.90%) and the 10Y UST also fell to 1.82% (from 2.07%). The swap spread therefore turned even more negative (-21bp from -17bp). For this spread to normalize towards the +20bp area, with 10Y CPI expectations (swap rate) anchored in the 2%-2.25% range, the 10Y UST yield would have to move towards 1.92% (this must be considered as a floor). 2. Slope: The UST yield curve has flattened again (to 105bp from 117bp). With the short end normalizing towards 1.25%, to reach the 10yr average slope (173bp), the 10Y UST yield could go to 2.98%. 3. Given the “new normal” (ZIRPs), a good entry point in the 10Y UST could be when real yield hits 1%. Given that our 2016 CPI forecast is now 1.5%, UST yield would have to rise to 2.5% to become a “BUY”. EURO BENCHMARK 10Yr BOND: Target at 0.6% yield // Ceiling at 0.88% 1. Swap Spread: Swap rates fell to 0.57% (from 0.75%) and the Bund yield fell to 0.12% (from 0.37%). The swap spread rose to 45bp (from 38bp). For the swap spread to normalize towards the 30-40bp area, with 10Y inflation expectations (swap rate) anchored in the 1%-1.25% range, the Bund yield would have to move towards 0.8%. 2. Slope: The slope of the EUR curve fell to 64bp (from 81bp). When the short end “normalizes” in the 0.25% area, to reach the 10yr average slope (113bp), the Bund yield would have to go to 0.88%.
Fixed Income – Peripheral Bonds: •
•
•
NEUTRAL STANCE
A series of factors suggest that we will see an increase in the intensity of ECB policy (depo rate cut, more collateral or a widening of QE through larger purchases and new eligible assets). Projected inflation is at historical lows. Macro surprises are collapsing since December. Activity surveys (manufacturing and services) point to a loss of momentum. Credit spreads are widening. Purchases of bank senior debt, though not discarded, is still controversial. This would undoubtedly have a huge short term impact. Spain: Situation remains uncertain under a hypothesis of potential new elections. Spanish bonds vulnerable. Portugal: Budget proposal was approved by the European Parliament. Risk remains regarding rating reviews by Fitch and DBRS. Targets (10Yr govt yields): Spain 1.8%, Italy 1.4%, Portugal 2.5% (up from 2%), IE 1.1%.
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ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Fixed Income – Corporate Bonds & EM Govies FIXED INCOME – CORPORATE CREDIT IG US$: Neutral // HY US$: UW CDX HY: Current spread at 523bp. Target 450bp. High yield prices bounced last week following the performance of stock prices. Activity in the US highyield primary market picked up slightly last week, although high-yield volumes are practically nonexistent, totaling just $16.6bn YTD, compared with $43.3bn priced over the same period last year (-62% y/y). Looking ahead, the forward calendar remains fairly quiet, with just two issuers (3 deals totaling $2.2bn in the calendar). In an extreme swing, HY ETFs attracted $1.05bn of inflows last week, regaining more than half of what was sold in February, while the majority of HY funds continue to experience steady -albeit modest- outflows. Although energy issuers now account for just 6% of the high yield index versus 10% in June 2014, we continue to have an UW stance. Sectors: OW- Financials, Media, Retail. UW- Metals & Mining, Energy and Utilities. CDX IG: Current spread 115bp. Target 85bp. We continue with a neutral view (the recent turmoil should not deteriorate into a full-blown financial crisis). We are also trimming our CPI forecast to 1.5%. We expect rating agencies to downgrade a number of investment-grade energy issuers to high yield this year, which will put additional pressure on the sector as a whole. Sectors: OW- Financials, Materials, Consumer. UW- Utilities, Healthcare, Industrials.
IG €: Neut-OW // HY €: UW We are revising our targets downwards, both for the investment grade and high yield index due to the increased uncertainty. Despite the revision, there is still room for spreads to improve. Low levels of activity in the Euro High Yield primary market, in contrast with the better tone in the Investment Grade space, where new issuance has gained speed last week and more supply is expected shortly. Sector News/performance: Recovery in spreads in Materials (along with the equity market) driven by further production cuts and EU support to mitigate the damage of Chinese imports. Stress has been transferred to banks, both senior and subordinated debt (due to NovoBanco case; doubts about the need to recapitalize Italian banks; uncertainty about coupon payments in DEUTSCHE BANK hybrids). We believe there are opportunities in financial debt, for several reasons: 1) ECB supervision, 2) Progress in provisioning energy exposure; 3) Significant placements of hybrid instruments expected to bring pressure to fix doubts, 4) ECB could end up buying senior bank debt... Bond picking (and liquid bets) is a “must”. Risks: Lower growth and a very complicated environment of negative rates (making fixed income instruments less attractive). Targets: Itraxx Europe at 85bp (vs current 109bp, and up from our previous target of 65bp). Itraxx HY at 360 (vs current 432 bp and up from 290bp).
FIXED INCOME - EMERGING MARKETS (GOVIES): “The conditions are not met” 10 Year
CPI (y/y)
10 Year
Yield
Last
Yield
Govies
reading
Real
3,35%
4,83%
5,61%
2,05%
1,50%
2,23%
1,60%
1,25%
Taiwan
8,19% 7,66% 3,72% 2,85% 3,91% 2,06% 2,25% 1,80% 0,85%
Turkey
10,38%
Indonesia India EM ASIA
Philippines China Malaysia Thailand Singapore
EME
South Korea
LATAM
To date, our rule of thumb for EM bonds has been “buy” when two conditions are met: (1) US Treasuries are cheap or at fair value; and (2) Real yields in EM bonds are 175bp above the real yield in UST. Is the UST cheap or at fair value? Historically a good entry point in the 10Y UST has been when real yields are at or above 1.75%. However, given the “new normal” (ZIRPs globally), a good entry point in the 10Y UST bond could be when the real yield is 1%. Given our 2016 target for US CPI of 1.5%, the UST bonds should be at 2.5% to be considered cheap. So the first condition is not met. Do real yields in EM bonds provide sufficient spread? If the first condition is met and under the “new normal” (ZIRPs), a good entry point in EM bonds could be when EM real yields are 100bp above the real yield of the UST. Since the projected real yield of USTs this year is 0.32% (1.82%-1.50%), the real yield of the EM bonds should be at least 1.32% (see table).
2,68%
1,23%
-0,85%
2,91%
0,00%
2,25%
1,28%
0,52%
0,14%
0,71%
8,81%
1,57%
Russian Federation 9,76%
12,92%
-3,16%
Brazil
10,67%
5,26%
2,13%
3,98%
6,77%
1,98%
4,40%
3,29%
Mexico Colombia Peru
15,93% 6,11% 8,75% 7,69%
14
ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Commodities ENERGY (OIL): Fundamental target at $40. Range (Buy at $30. Sell at $50). Price & volatility Oil producers may face long-term price weakness. Previous supply gluts have shown that a broad gap between demand and capacity puts a ceiling on a strong rebound in prices, often for a long time. Additionally, shortterm rallies may encourage complacency among producers, who may convince themselves there is no need to cooperate to cut production. Recent sharp swings in the oil price (with 2016 seeing a median daily change in barrel price of ~3.1%) are not being driven by any fundamental change. In the absence of a shift in market fundamentals, investors should expect the choppy market to continue. Production will remain high despite cuts in Canada and North Sea. IEA says crude glut likely to persist. While shale production is poised to fall this year and into 2017, the oil oversupply is likely to last until at least the end of 2017. Shale is likely to come back once prices rally, with operations in some basins being profitable at prices below $50/barrel. Abdalla El-Badri, Secretary-General of OPEC, told the IHS CERAWeek conference in Houston that shale production would cover any reduction in output by OPEC, saying that an oil-price rally to $60 could bring back many producers. Bloomberg also discusses his comments, in which Badri said about US shale, “I don’t know how we are going to live together.” Statoil may double Gulf of Mexico output by 2018. The Norwegian oil producer is looking to increase its Gulf production, noting that each barrel it pumps is five times more valuable than crude from its Norwegian heartland because of different taxation levels. Canada’s major oil sands producers mulling output cuts. Some producers are starting to consider slowing output at their huge thermal operations in northern Alberta despite the financial and technical difficulties involved (producers are worried about the high potential costs of cutting and later cranking up production and the risk of upsetting the delicate balance needed to pump out heated bitumen when wells stand idle for too long). Low oil prices are a significant challenge for North Sea producers. Almost half the sector’s producing fields operating at a loss and investments in new ones being curbed. Companies could drill as few as seven exploration wells this year, the fewest for any year since tracking began in the late 1970s. It adds that the North Sea industry could spend just ~$1B on exploration, just 1/8 the average over the past few years. Mergers Oil mergers hindered by heavy debt loads. Oil and gas drillers are reluctant to acquire rivals pummeled by the downturn because of huge debt burdens that would become payable on takeover.
15
ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Commodities GOLD: Buy at US$ 900/oz. Sell above US$1,000 Negative drivers: 1. Gold in real terms. Gold at constant 2009 prices is now at $1,110 (vs $1,014 the previous month and still above its 20 year average of $750). Given our global deflator (we use the US Implicit Price Deflator-Domestic Final Sales base year 2009 as a proxy) of 1.1030, for the gold price to stay near its historical average in real terms, the nominal price must remain near US$827. 2. Gold in terms of Oil (Gold / Oil): This ratio has increased to 38.48x (from 33.6x last month) and remains above its LT average of 14.09. If the average oil price stays at $40, the nominal price of gold must approach US$563 for this ratio to remain near its LT average level. 3. Gold in terms of the DJI (Dow Jones / Gold): This ratio (inverse) has moved to 13.41x (from 14.39x last month), still below its LT average of 20.4x. Given our new target price for the DJI of $16,700), the price of gold must approach US$818 for this ratio to remain near its LT average. 4. Positioning in gold points to further falls: CEI 100oz Active Future non comm. contracts: longs 209k from prior 158k. Shorts 91k from prior 114k => Net of +117k from prior +43k (Speculators are once again longer than a month ago). 5. Financial liberalization in China. Higher “quotas� each month in the QFII are widening the investment alternatives for Chinese investors (historically focused on gold). 6. Central bank activity: Central banks have gradually reduced their stocks of gold after heavy reserves accumulation during the years prior to 2012 (see chart below). Despite this, gold stocks at central banks are still considerably higher than 2008 levels. 7. Monetary stimulus by ECB and BOJ continues, but not by the Fed (remember the price of gold is in USD). This points to the following dynamics: gold stable or downward in terms of USD; gold price following an upward trend versus the EUR and JPY, which means that the USD must rise relative to the EUR and the JPY. Positive drivers: 1. Amount of gold in the world: The total value of gold in the world is circa US$6.9tn, a fairly small percentage (3.2%) of the total size of the financial cash markets (212tn). The daily volume traded in the LBMA and other gold marketplaces is around US$173bn (2.5% of the world's gold and just 0.08% of the total in the financial markets).
16
ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Currencies • EUR/USD: MT Target (1.00 – 1.05) Since mid-January, macro surprises have declined to their most negative since June 2015. At the country level, the most negative macro surprises are now for Japan and the Euro area. This, alongside strong positioning in these two currencies, represents a signal for FX returns and shows that the combination of weak economic momentum, long positioning and therefore rich valuations present some downside risk for the EUR. The positioning in the EUR/USD cross is now almost neutral (just US$-8bn. compared to–US$18bn seen one month ago). There is still plenty of room for speculators to reach the lower end of the range seen in the last 12 months and build shorter positions in EUR. If true, the EUR/USD could fall further towards 1.00-1.05.
• JPY/USD: MT Target (120). JPY/EUR: MT Target (126) JPY continued its medium-term positioning shift as net longs remain near record highs.
• • • • • • • •
GBP/USD: MT Target (0.65). GBP/EUR: MT Target (0.68) CHF/USD: MT Target (1.00). CHF/EUR: MT Target (1.05) MXN/USD: MT Target (17.5). MXN/EUR: MT Target (18.4) BRL/USD: MT Target (4.00). MXN/EUR: MT Target (4.20) RUB/USD: Neutral AUD/USD: UW AUD CAD/USD: OW CAD CNY/USD: MT Target (6.20). Outlook: After a poorly handled attempt to move to a more
•
market-determined exchange rate, and with the US dollar strong across the board and the likelihood that the foreign exchange market has now largely priced in the prospect of Federal Reserve tightening, the US dollar is likely to weaken over the six to 12 months following the Fed’s first rate hike (based on experience). EM FX/USD: NEUTRAL-BULLISH
Currency
Values of Change vs Net positions last week 1-yr Max 1-yr Min 1-yr Avg (Bn $) (Bn $) (Bn $) (Bn $) (Bn $)
Current Z-score 3-yr
4,0
Max Min Current
SPECULATIVE POSITION IN THE FX MARKETS (3Yr - Z SCORES. Max, Min & Current in 1Yr)
3,0
USD vs All USD vs G10 EM EUR JPY GBP CHF BRL MXN RUB AUD CAD
14,25 12,99 -1,25 -8,82 4,74 -3,25 -0,92 -0,06 -1,23 0,04 -0,40 -3,75
-0,23 -0,22 0,01 0,12 0,04 0,04 0,01 0,00 0,01 0,00 0,00 0,00
47,7 46,2 0,1 -8,8 5,3 0,7 1,4 0,3 0,3 0,2 0,6 0,6
0,0 13,0 -2,8 -30,4 -11,7 -4,3 -3,2 -0,3 -2,7 -0,1 -5,9 -5,1
30,7 30,8 -1,3 -19,1 -3,7 -2,2 -0,3 0,0 -1,4 0,0 -2,6 -2,7
-0,57 -0,80 -0,64 0,18 2,94 -0,71 -0,33 -0,12 -0,72 0,20 0,33 -0,56
ANDBANK
2,0 1,0 0,0 -1,0 -2,0 -3,0 -4,0
ANDBANK -5,0 USD vs All
USD vs G10
EM vs USD
EUR vs USD
JPY vs USD
GBP vs USD
CHF vs USD
BRL vs USD
MXN vs RUB vs AUD vs CAD vs USD USD USD USD
17
ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Market Outlook – Fundamental Expected Performance Performance Performance Performance Asset Class
Indices
Equity
USA - S&P 500
Current
2016
Expected
29/02/2016
Target
Performance*
1.948
1949
0,1%
330
360
8,9%
-12,4%
8.363
8943
6,9%
2015
Last month
YTD
-0,73%
0,4%
-4,7%
6,79%
-3,5%
-9,8%
-7,15%
-5,1%
29/02/2016 EUROPE - STOXX 600 SPAIN - IBEX 35 MEXICO - MXSE IPC
-0,39%
-0,4%
1,2%
43.473
47797
9,9%
BRAZIL - BOVESPA
-13,31%
2,9%
-4,1%
41.593
50000
20,2%
JAPAN - NIKKEI 225
9,07%
-8,5%
-15,8%
16.027
16445
2,6%
CHINA - SHANGHAI COMPOSITE
9,41%
-1,8%
-24,1%
2.688
3247
20,8%
KONG KONG - HANG SENG
-7,16%
-2,9%
-12,8%
19.112
20521
7,4%
INDIA - SENSEX
-5,03%
-7,5%
-11,9%
23.002
27965
21,6%
MSCI EM ASIA
-7,90%
-0,1%
-6,5%
619
665
7,4%
Fixed Income
US Treasury 10 year govie
1,6%
4,6%
1,74
2,50
-4,34%
Core countries
UK 10 year Guilt
1,9%
5,2%
1,35
2,15
-5,06%
German 10 year BUND
1,8%
4,3%
0,11
0,60
-3,86%
Fixed Income
Spain - 10yr Gov bond
-0,3%
1,9%
1,56
1,80
-0,37%
Peripheral
Italy - 10yr Gov bond
-0,1%
1,4%
1,46
1,40
1,90%
Portugal - 10yr Gov bond
-2,0%
-3,2%
2,93
2,50
6,38%
Ireland - 10yr Gov bond
0,4%
3,0%
0,79
1,10
-1,70%
Fixed Income
Credit EUR IG-Itraxx Europe
-0,3%
-0,7%
103,90
85
1,10%
Credit
Credit EUR HY-Itraxx Xover
-1,3%
-2,6%
425,25
360
5,19%
IG & HY
Credit USD IG - CDX IG
-0,2%
-0,2%
109,74
85
2,69%
Credit USD HY - CDX HY
-0,9%
-1,3%
535,04
450
8,07%
Turkey - 10yr Gov bond
2,2%
2,3%
10,38
9,88
14,38%
4,8%
1,2%
9,76
10,76
1,76%
Fixed Income
EM Europe (Loc) Russia - 10yr Gov bond Fixed Income
Indonesia - 10yr Gov bond
0,9%
6,4%
8,19
7,20
16,07%
Asia
India - 10yr Gov bond
1,6%
2,0%
7,66
7,03
12,71%
(Local curncy)
Philippines - 10yr Gov bond
3,4%
3,2%
3,72
3,35
6,70%
China - 10yr Gov bond
0,3%
0,0%
2,85
2,36
6,80%
Malaysia - 10yr Gov bond
-0,2%
2,7%
3,91
3,35
8,43%
Thailand - 10yr Gov bond
1,9%
3,5%
2,06
1,27
8,38%
Singapore - 10yr Gov bond
-0,1%
3,0%
2,25
1,47
8,51%
South Korea - 10yr Gov bond
1,7%
2,8%
1,80
2,00
0,16%
Taiwan - 10yr Gov bond
1,1%
1,4%
0,85
0,97
-0,16%
Fixed Income
Mexico - 10yr Govie (Loc)
-0,2%
2,1%
6,11
6,50
2,99%
Latam
Mexico - 10yr Govie (usd)
1,9%
2,0%
3,90
4,40
-0,08% 15,37%
Commodities
Fx
Brazil - 10yr Govie (Loc)
1,5%
6,9%
15,93
16,00
Brazil - 10yr Govie (usd)
2,4%
6,6%
7,00
7,00
7,02%
CRY
-8,2%
-3,0%
161,7
190,0
17,52%
Oil (WTI)
-11,9%
-2,9%
32,6
40,00
22,59%
GOLD
16,3%
10,4%
1.234,2
900,0
-27,08%
EUR/USD ($ to 1€)
0,4%
0,7%
1,091
1,05
-3,72%
GBP/USD (£ to 1$)
6,3%
2,8%
0,72
0,65
-9,90%
GBP/EUR (£ to 1€)
6,8%
3,4%
0,79
0,68
-13,23%
CHF/USD (c hf to 1$)
-0,2%
-2,2%
1,00
1,00
0,03%
CHF/EUR (chf to 1€)
0,2%
-1,6%
1,09
1,05
-3,72%
JPY/USD (¥ to 1$)
-6,1%
-6,7%
112,92
120
6,27%
JPY/EUR (¥ to 1€)
-5,6%
-6,1%
123,17
126,00
2,30%
MXN/USD (mxn to 1$)
6,3%
0,8%
18,25
17,50
-4,11%
MXN/EUR (mxn to 1€)
6,7%
1,5%
19,90
18,38
-7,67%
BRL/USD (brl to 1$)
0,8%
-0,1%
3,99
4,00
0,19%
BRL/EUR (brl to 1€) CNY (cny to 1$)
1,3% 0,9%
0,5% -0,4%
4,35 6,55
4,20 6,20
-3,53% -5,34%
* For Fixed Income instruments, the expected performance refers to a 12 month period
18
ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Monthly Tactical Global Asset Allocation Proposal Conservative
Moderate
Balanced
Growth
< 5%
5%/15%
15%/30%
30%>
Max Drawdown
Strategic Tactical (%) (%)
Asset Class
Strategic (%)
Tactical (%)
Strategic (%)
Tactical (%)
Strategic Tactical (%) (%)
Money Market
15,0
22,2
10,0
15,5
5,0
8,4
5,0
8,6
Fixed Income Short-Term
25,0
23,9
15,0
15,0
5,0
5,4
0,0
0,0
Fixed Income (L.T) OECD
30,0
25,8
20,0
18,0
15,0
14,7
5,0
5,0
US Gov & Municipals & Agencies
12,9
EU Gov & Municipals & Agencies European Peripheral Risk Credit (OECD)
20,0
7,3
2,5
2,6
1,8
1,5
0,5
10,3
7,2
5,9
2,0
19,1
20,0
20,0
15,0
16,3
5,0
5,6
Investment Grade USD
7,6
8,0
6,5
2,2
High Yield USD
1,9
2,0
1,6
0,6
Investment Grade EUR
5,7
6,0
4,9
1,7
High Yield EUR
3,8
4,0
3,3
1,1
Fixed Income Emerging Markets
5,0
4,3
7,5
6,8
10,0
9,8
15,0
15,0
Latam Sovereign
1,7
2,7
3,9
6,0
Latam Credit
0,9
1,4
2,0
3,0
Asia Sovereign
1,3
2,0
2,9
4,5
Asia Credit
0,4
0,7
1,0
1,5
Equity OECD
5,0
4,8
20,0
20,0
32,5
35,3
50,0
55,6
US Equity
1,9
8,0
14,1
22,2
European Equity
2,9
12,0
21,2
33,3
Equity Emerging
0,0
0,0
5,0
3,8
10,0
8,2
10,0
8,3
Asian Equity
0,0
2,6
5,7
5,8
Latam Equity
0,0
1,1
2,4
2,5
Commodities
REITS
9,0
0,0
0,0
2,5
0,9
5,0
1,9
5,0
1,9
Energy
0,0
0,35
0,8
0,78
Minerals & Metals
0,0
0,18
0,4
0,39
Precious
0,0
0,26
0,6
0,58
Agriculture
0,0
0,1
0,2
0,2
0,0
0,0
0,0
0,0
2,5
0,0
5,0
0,0
This recommended asset allocation table has been prepared by the Asset Allocation Committee (AAC), made up of the managers of the portfolio management departments and the product managers in each of the jurisdictions in which we operate. Likewise, the distribution of assets within each customer profile meets the risk control requirements established by regulations.
19
ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Appendix I Signs of life in Brazil? Very early to ensure nothing. Real GDP will fall this year at least 3%, and the country suffers its worst crisis since 1901. But here I leave some good data for the month of February.
Brazil - PMI Manufacture
Brazil - PMI Composite Monthly BR, Index, Markit PMI, Output
31/03/2013 - 31/03/2016 (UTC)
Monthly BR, Index, Markit PMI, Business Surveys, PMI, Manufacturing Sector, Total
31/03/2013 - 31/03/2016 (UTC)
Line; BR, Index, Markit PMI, Business Surveys, PMI, Manufacturing Sector, Total; Economic Indicator(Last); (S1; S2); 31/01/2016; 47,400N/A; N/A
Line; BR, Index, Markit PMI, Output; Economic Indicator(Last); (S1; S2); 31/01/2016; 45,100N/A; N/A 52
51,6
51,5
51,2 51
50,8
50,5
50,4
50 49,5
50
49
49,6
48,5
49,2
48
48,8
47,5
48,4 47
48 46,5
45,5
47,6 47,400 47,2
45,100 45
46,8
44,5
46,4
44
46
46
43,5
45,6
43
45,2 42,5
44,8
42
44,4
41,5
44
41 Auto Q2
Q3 2013
Q4
Q1
Q2
Q3 2014
Q4
Brazil - PMI Services
Q1
Q2
Q3 2015
Q4
Q1
Auto Q2
2016
Q3 2013
Q4
Q1
Q2
Q3 2014
Q4
Q1
Q2
Q3 2015
Q4
Q1 2016
Brazil - Consumer Confidence Survey Monthly 2005M9=100, BR, Consumer Surveys, Index, Consumer confidence (CCI)
31/08/2008 - 31/07/2016 (UTC)
Line; 2005M9=100, BR, Consumer Surveys, Index, Consumer confidence (CCI); Economic Indicator(Last); (Base Year=2005)(S1; S2); 29/02/2016; 68,500 N/A; N/A 112 110 108 106 104 102 100 98 96 94 92 90 88 86 84 82 80 78 76 74 72 70 68,500 68 66 Auto Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008 2009 2010 2011 2012 2013 2014 2015 2016
20
ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Principal Contributors
Alex Fusté. – Chief Global Economist – Global & Asia: Macro, Rates & FX. +376 881 248 Giuseppe Mazzeo. – CIO Andbank US – U.S. Rates & Equity. +1 786 471 2426 Eduardo Anton. – Portf. Manager US – Credit & Quasi governments. +1 305 702 0601 J.A Cerdan. – Equity Strategist Europe – European Equity. +376 874 363 Renzo Nuzzachi, CFA. – Product Manager LatAm – Rates & FX. +5982-626-2333 Jonathan Zuloaga. – Analyst, Mexico – Macro, bonds & FX. +52 55 53772810 Albert Garrido. – Portfolio Manager Andorra – European Equity. +376 874 363 Ricardo Braga. – Product Analyst Brazil – Products. +55 11 3095 7075 Gabriel Lopes. – Product Analyst Brazil – Products. +55 11 3095 7075 Andrés Davila. – Head of Asset Management Panama – Venezuela. +507 2975800 Mª Angeles Fernández. – Product Manager, Europe – Macro & Rates. +34 639 30 43 61 David Tomas. – Wealth Management, Spain – Spanish Equity. +34 647 44 10 07 Andrés Pomar. – Portfolio Manager Luxembourg – Volatility. +352 26 19 39 25 Carlos Hernández. – Product Manager – Technical Analysis. +376 873 381
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ECONOMY & FINANCIAL MARKETS CORPORATE REVIEW MARCH-16
Legal Disclaimer All notes and sections in this document have been prepared by the team of financial analysts at ANDBANK. The opinions stated herein are based on a combined assessment of studies and reports drawn up by third parties. These reports contain technical and subjective assessments of data and relevant economic and sociopolitical factors, from which ANDBANK analysts extract, evaluate and summarize the most objective information, agree on a consensual basis and produce reasonable opinions on the questions analyzed herein. The opinions and estimates contained herein are based on market events and conditions occurring up until the date of the document's publication and cannot therefore be decisive in evaluating events after the document's publication date. ANDBANK may hold views and opinions on financial assets that may differ partially or totally from the market consensus. The market indices have been selected according to those unique and exclusive criteria that ANDBANK considers to be most suitable. ANDBANK does not guarantee in any way that the forecasts and facts contained herein will be confirmed and expressly warns that past performance is no guide to future performance, that analyzed investments could be unsuitable for all investors, that investments can vary over time regarding their value and price, and that changes in the interest rate or forex rate are factors which could alter the accuracy of the opinions expressed herein. This document cannot be considered in any way as a selling proposition or offer of the products or financial assets mentioned herein, and all the information included is provided for illustrative purposes only and cannot be considered as the only factor in the decision to make a certain investment. Additional major factors influencing this decision are also not analyzed in this document, including the investor's risk profile, financial expertise and experience, financial situation, investment time horizon and the liquidity of the investment. As a consequence, the investor is responsible for seeking and obtaining the appropriate financial advice to help him assess the risks, costs and other characteristics of the investment that he is willing to undertake. ANDBANK expressly disclaims any liability for the accuracy and completeness of the evaluations mentioned herein or for any mistakes or omissions which might occur during the publishing process of this document. Neither ANDBANK nor the author of this document shall be responsible for any losses that investors may incur, either directly or indirectly, arising from any investment made based on information contained herein. The information and opinions contained herein are subject to change without notice.
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