MARKET RESEARCH

Jan 20th Jan 24th

SPOTLIGHT
China GDP Growth Rate (YoY)

Portuguese deficit stands below target

PSI-20 closed on red territory this week, the first negative performance since the beginning of the year. Although good news were released related to Portugal, during the week, PSI-20 was pushed back by the major stock markets. The Portuguese deficit stood at 4.4% of the GDP, below the 5.5% that had been agreed with 'troika'. Also, Portugal recorded the largest decrease (QoQ), among all the EU countries, in the public debt as percentage in the GDP, during Q3 of 2013. Moreover, Eurostat revealed that the price of homes in Portugal fell 2.9% (QoQ), during the same period.
Wkly Chg
-4.79% -3.99% -2.42% -3.60% -3.84% -2.18% -2.95%

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INDEXES PERFORMANCE
Jan 20
PSI 20 STOXX 50 FTSE 100 DAX CAC 40 NIKKEI 225 HANG SENG
7,106.00 3,153.17 6,836.73 9,715.90 4,322.86 15,641.68 22,928.95

Jan 21
7,079.84 3,153.08 6,834.26 9,730.12 4,323.87 15,795.96 23,033.12

Jan 22
6,845.76 3,151.27 6,826.33 9,720.11 4,324.98 15,820.96 23,082.25

Jan 23
6,839.62 3,117.08 6,773.28 9,631.04 4,280.96 15,695.89 22,733.90

Jan 24
6,773.50 3,028.20 6,663.74 9,392.02 4,161.47 15,391.56 22,450.06

Spain issues 10-year debt at a 0.726% yield

European markets closed negative, after U.K. retail sale volumes declined sharply to a reading of 14.0 this month from 34.0 in December, dampening optimism over the U.K.s economic outlook. Still in the U.K., the unemployment rate ticked down to 7.1% in November, from 7.4% in October. German economic sentiment dipped 0.3 points, hitting 61.7 this month, with the Manufacturing PMI increasing to 56.3, above expectations. Furthermore, Euro zone manufacturing activity inched up to a seasonally adjusted 53.9 this month. Lastly, Spain issued 10 billion euros in 10-year bonds maturing in April 2024, the highest amount ever placed through a syndication, at a 0.726% yield, down from the 0.883% of the previous placement.

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CURRENCIES
Jan 20
EUR/USD EUR/CHF EUR/GBP EUR/JPY EUR/YUAN AUD/JPY
1.355 1.234 0.825 141.220 8.198 91.780

Jan 21
1.356 1.235 0.823 141.310 8.207 91.740

Jan 22
1.354 1.236 0.818 141.750 8.196 92.560

Jan 23
1.369 1.229 0.823 141.530 8.286 90.550

Jan 24
1.368 1.223 0.830 139.970 8.273 88.880

Wkly Chg
1.01% -0.75% 0.65% -0.91% 1.00% -2.99%

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Chinese economy rose more than expected

Jan 21 0.242% 0.302% 0.409% 0.571% 0.351% Jan 22 0.241% 0.301% 0.406% 0.570% 0.238% Jan 23 0.240% 0.300% 0.404% 0.570% 0.210% Jan 24 0.238% 0.300% 0.401% 0.567% 0.191%

v
Euribor 1M Euribor 3M Euribor 6M Euribor 12M Eonia

REFERENCE RATES
0.240% 0.302% 0.408% 0.570% 0.359%

Jan 20

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BOND YIELDS
Jan 20 Portugal 6M Portugal 5Y Portugal 10Y Spain 10Y France 10Y Italy 10Y Germany 10Y UK 10Y 0.758%
3.595% 4.963% 3.687% 2.397% 3.794% 1.740% 2.828%

Jan 21 0.840%
3.595% 4.927% 3.729% 2.415% 3.827% 1.743% 2.838%

Jan 22
0.640% 3.552% 4.895% 3.726% 2.439% 3.822% 1.755% 2.883%

Jan 23 0.635%
3.647% 5.019% 3.757% 2.427% 3.863% 1.714% 2.816%

Jan 24 0.618%
3.799% 5.098% 3.782% 2.378% 3.893% 1.655% 2.778%

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This week Asian equities fell, with Hang Seng leading losses. The Chinese economy grew a stronger-thanexpected 7.7% (YoY) in Q4 of 2013, compared to government's target of 7.5%. Also, the countrys central bank added more than $42 billion to the financial system and expanded a loan facility to meet demand for cash. However, concerns over the Chinese governments ability to cope with escalating debt are showing up in record borrowing costs for the nations banks. Moreover, the manufacturing activity contracted for the first time in six months in January to 49.6, well below market expectation of 50.3. The Bank of Japan kept monetary policy steady and maintained its upbeat consumer inflation forecasts, encouraged by signs that a broadening economic recovery may nudge firms into spending more on wages and investment. Lastly, the Australian inflation rate rose more than expected to 2.7%, in Q4 of 2013.

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SPOTLIGHT
Argentina Industrial Production Growth Rate (YoY)

US stocks fall, with DJIA leading losses

U.S. stocks finished the week registering losses, with the Dow Jones Industrial Average tumbling triple-digits for a second session and posting its worst week since November 2011, as investors pulled money from emerging markets and other assets viewed as risky. On the economic front, U.S. manufacturing activity expanded at a slower rate than expected in January, falling to a 3-month low of 53.7. Analysts had expected the index to hold steady at 55.0 this month. Sales of previously owned homes climbed in December for the first time in 5 months, capping the best year since 2006 and indicating the real-estate market is starting to adjust to higher borrowing costs. Purchases rose 1% to a 4.87 million annual pace. Other reports showed that applications for U.S. unemployment benefits in the last week rose in line with expectations, official data showed on Thursday.

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INDEXES PERFORMANCE
Jan 20
S&P 500 DJIA NQ 100 S&P Lac 40
3,481.38

Jan 21
1,843.80 16,414.44 3,617.70 3,455.03

Jan 22
1,844.86 16,373.34 3,627.72 3,478.98

Jan 23
1,828.46 16,197.35 3,613.76 3,399.45

Jan 24
1,790.29 15,879.11 3,541.48 3,321.77

Wkly Chg
-2.63% -3.52% -1.39% -4.60%

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Mexico outperforms neighbors trend

Argentina's trade balance during 2013 left a surplus of 9.24 billion dollars, 27% less than in the previous year (12.42bn). Exports in the past year grew by 3% to reach a value of 83bn dollars, while imports rose by 8% and totaled just over 74bn. Moreover, Argentina's December industrial production fell 5.6% from a year earlier, falling far short of expectations of a 4.2% decline. Brazils deficit in the current account widened to $8.7 billion in December, from $5.1 billion in the previous month, pushing last years gap to a record. Moreover, foreign direct investment flows failed to cover Brazil's current account gap for the first time in more than a decade, worsening the balance of payments. Lastly, Mexican retail sales posted better than expected results, rising to 1.9% contrary forecasts of 0.8%.

CURRENCIES
Jan 20
USD/JPY USD/YUAN AUD/USD GBP/USD USD/CHF USD/CAD
104.250 6.053 0.880 1.643 0.911 1.096

Jan 21
104.230 6.051 0.880 1.648 0.911 1.097

Jan 22
104.650 6.051 0.884 1.656 0.912 1.110

Jan 23
103.390 6.052 0.876 1.663 0.898 1.111

Jan 24
102.340 6.103 0.868 1.648 0.894 1.109

Wkly Chg
-1.91% 0.01% -1.10% 0.36% -1.74% 1.13%

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COMMODITIES
2.72% 20.36% 1.53% 1.06%
Crude Oil WTI Natural Gas Crude Oil Brent Corn

1.29% -1.92% -2.30% -0.20%

Gold Silver Copper Sugar

Natural Gas soared amid cold temperature

Natural gas soared nearly 20% to hit a four-year high during the week, as frigid temperatures and snowstorms struck from the Midwest to the East Coast for the second time this month, tightening supplies. Gold on the other hand inched up after a global stock-market selloff sent investors snapping up nicely priced positions in the yellow metal even on expectations for the Federal Reserve to trim its monthly bond-buying program next week.

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US TREASUR Y YIELDS
Jan 20 US 3M US 1Y US 10 Y US 30 Y
0.041% 0.108% 2.829% 3.750%

Jan 21
0.033% 0.107% 2.832% 3.750%

Jan 22
0.035% 0.104% 2.867% 3.762%

Jan 23
0.038% 0.099% 2.779% 3.684%

Jan 24
0.043% 0.107% 2.719% 3.635%

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Carlos Pereira

Catarina Borges

David Novo

Jorge Rodrigues

Pratik Ashok

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