• Yellen: “Evidence shows reforms have made the financial system safer”
  • Euro gains 0.7% to $1.1881 against the dollar
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European markets reversed gains on Thursday and finished in the red after Janet Yellen’s speech at Jackson Hole pushed the euro to $1.1880. The Fed president defended measures adopted in the last decade, but mentioned nothing in respect to upcoming interest rate hikes or the reduction of the balance of $4.5bn. "The evidence shows that reforms since the crisis have made the financial system substantially safer," Yellen said.

IBEX 35

  • 11.599,100
  • -0,11%

The testimony of Janet Yellen in the central bankers’ symposium will be followed by ECB president Mario Draghi at 9pm Spanish time. Experts from Link Securities point out that Draghi “will be defensive on this occasion, not bringing forward anything new about the withdrawal of stimulus, something that ECB leaders will discuss in the coming months.”

The Ibex 35 closed down 0.12% and is now at 10,345 points. Indra gained 1.26% and led the gains in the Spanish index, accompanied by Tecnicas Reunidas, which received an improved recommendation from Kepler, and was up 0.99%. Abertis was the third best performer after finishing 0.8% higher. The worst performers on the day were Cellnex (-1.84%), DIA (-1.57%) and Melia Hotels (-1.29%).

In general, the fiscal week has saw a similar lateral movement, and with volume considerably down as is the norm during the summer. The Spanish index has been toying with the 10,400-point level for the last four days.

Banks continue to be the key in the short term. The European banking sector, according to Bolsamanía experts, is losing momentum and it’s not good news for the major indices. The sector is up 13% for the year and without doubt is a main driver of the positive movement of the markets. If this begins to flatten, they could be on a downward spiral.

In the macro data realm, German consumer confidence figures fell in August to 115.9 from the record 116 points, although it remains very strong, according to the IFO president. German GDP grew by 0.6% in the second quarter in comparison to the previous three months. In Japan, CPI was situated at 0.4% in July.

“In recent sessions the highs and lows have been quite narrow and the volume very low, similar to the last days of 2016. There’s little more to add that we have not said recently as the immediate resistance zone we find at 10,444 points and most importantly the key resistance of 10,660. Below we have monthly lows of 10,250 and 10,200 points, the downside base,” explained Bolsamanía technical expert José María Rodríguez.

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