MARKET RESEARCH

Dec 30th Jan 03rd

SPOTLIGHT
Portuguese Industrial Production Growth Rate (YoY)

Economic data beats expectations

PSI-20 started the year with a 1.87% weekly return, contradicting the trend of the main European Markets. The most important news were related to the economic indicators, with the industrial production growing 2.9% (YoY) in November, beating expectations of 0.26% decrease. Also, retail sales surprised analysts that expected it to drop, as the indicator rose 3.6% (YoY) in November. The Automobile Association of Portugal (ACAP) announced that during last year 126 684 motor vehicles were sold in Portugal, representing an increase of 11.7% compared to 2012. Finally, according to data from Bloomberg, Optimus Zon surpassed Portugal Telecom (PT) in market value. The company reached a market capitalization of 2.8 billion.

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INDEXES PERFORMANCE
Dec 30
PSI 20 STOXX 50 FTSE 100 DAX CAC 40 NIKKEI 225 HANG SENG
6,553.60 3,100.93 6,731.27 9,552.16 4,275.71 16,178.94 23,244.87

Dec 31
6,558.85 3,109.00 6,749.09 4,295.95 23,306.39

Jan 01
-

Jan 02
6,621.54 3,059.93 6,717.91 9,400.04 4,227.28 23,340.05

Jan 03
6,768.90 3,074.43 6,730.67 9,435.15 4,247.65 22,817.28

Wkly Chg
1.87% -1.19% -0.30% -1.61% -0.70% 0.00% -1.83%

Italy issues 3 billion of ten-year debt

The European markets closed the first week of the year in negative ground. Moreover, Italys Treasury sold 3 billion worth of ten-year debt at an average yield of 4.11%, up from 4.01% at a similar auction last month. In the U.K., manufacturing activity expanded at a slower rate than expected in December. Spain brought good news, with their retail sales rising by a seasonally adjusted 1.9% last month, easily surpassing expectations for a 0.3% decline. Lastly, German manufacturing PMI rose to a seasonally adjusted 54.3, from 54.2 in the preceding month. Analysts had expected it to remain unchanged at 54.2 last month.

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CURRENCIES
Dec 30
EUR/USD EUR/CHF EUR/GBP EUR/JPY EUR/YUAN AUD/JPY
1.381 1.225 0.837 144.880 8.368 93.590

Dec 31
1.376 1.227 0.831 144.840 8.323 93.940

Jan 01
1.377 1.227 0.830 145.000 8.323 93.670

Jan 02
1.367 1.229 0.831 143.280 8.269 93.370

Jan 03
1.359 1.230 0.828 142.470 8.223 93.800

Wkly Chg
-1.13% 0.38% -0.78% -1.44% -1.38% 0.61%

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

REFERENCE RATES
Dec 31 0.216% 0.287% 0.389% 0.556% 0.446% Jan 01 Jan 02 0.214% 0.284% 0.387% 0.555% 0.152% Jan 03 0.208% 0.280% 0.381% 0.551% 0.111% 0.221% 0.288% 0.389% 0.558% 0.223%

Shanghai stars the New Year in the red

Asian equity was low this week with the Hang Seng leading losses, while the Nikkei was closed almost the entire week. In the Chinese front the localgovernment debt swelled to 17.9 trillion yuan ($2.95 trillion), underscoring risks to the financial system as President Xi Jinping rolls out economic reforms. Moreover, factory activity expanded at its slowest pace in three months in December. The final reading of HSBCs PMI stood at 50.5, in line with market expectations. In Australia the private sector credit rose 0.3 percent in November, signaling that consumers and businesses are still cautious to take on more debt. Lastly the Singapore's economy contracted more than expected in the fourth quarter as manufacturing activity weakened, data showed on Thursday, casting some doubt on market expectations for a slight pick-up in growth over 2014.

Dec 30

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BOND YIELDS
Dec 30 Portugal 6M Portugal 5Y Portugal 10Y Spain 10Y France 10Y Italy 10Y Germany 10Y UK 10Y 1.247%
4.878% 6.157% 4.135% 2.438% 4.086% 1.941% 3.036%

Dec 31 1.247%
4.905% 6.040% 4.144% 2.432% 4.089% 1.941% 3.032%

Jan 01 4.905% 6.033% 4.144% 3.036%

Jan 02 1.195%
4.691% 5.865% 3.982% 2.418% 3.972% 1.946% 3.035%

Jan 03 1.173%
4.471% 5.675% 3.898% 2.415% 3.922% 1.944% 3.029%

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SPOTLIGHT
U.S. CB Consumer Sentiment

North-American stocks yield losses

The U.S. stocks closed in red territory before and after the holidays. Despite the performances of Garmin Lda and Southwest Airlines Co led S&P downwards, Fiat's $4.35 billion deal to gain full control of Chrysler Group LLC sent its shares to a near 2-1/2year high on Thursday, even among doubts over whether the Italian carmaker could use the merger to cut losses in Europe. On the economic front, contracts to purchase previously owned U.S. homes edged up in November, marking the first increase in six months and providing a hopeful sign the sector has begun to stabilize after its momentum was sapped by rising mortgage rates. In the labour market, applications for U.S. unemployment benefits declined last week to the lowest level in a month, to 339 000, as the volatility typical during the year-end holidays waned. Moreover, U.S. consumer confidence rose more-than-expected in December to hit a threemonth high, industry data showed on Tuesday. In a report, a market research group said its index of consumer confidence improved to 78.1 in December from a reading of 70.4 in November. Lastly, manufacturing grew in December at the second-fastest pace in more than two years, fueled by a gain in orders that will help propel the U.S. expansion.

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INDEXES PERFORMANCE
Dec 30
S&P 500 DJIA NQ 100 S&P Lac 40
1,841.07 16,504.29 3,570.08 3,654.27

Dec 31
1,848.36 16,576.66 3,592.00 3,664.49

Jan 01
-

Jan 02
1,831.98 16,441.35 3,563.57 3,563.84

Jan 03
1,831.37 16,469.99 3,538.73 3,568.03

Wkly Chg
-0.54% -0.05% -0.99% -2.54%

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CURRENCIES
Dec 30
USD/JPY USD/YUAN AUD/USD GBP/USD USD/CHF USD/CAD
104.920 6.062 0.892 1.649 0.887 1.065

Dec 31
105.290 6.054 0.892 1.656 0.892 1.062

Jan 01
105.330 6.054 0.889 1.658 0.892 1.065

Jan 02
104.840 6.051 0.891 1.645 0.899 1.067

Jan 03
104.850 6.103 0.895 1.642 0.905 1.064

Wkly Chg
-0.30% 0.53% 0.90% -0.36% 1.53% -0.68%

Positive data released in South America

Brazils trade balance rose unexpectedly last week, to 2.65B from 1.74B in the preceding week. In Chile, the industrial production registered a better-thanexpected result of -1,1% contrary the forecasts that pointed to -1,3%. Nevertheless, Chile's economy signaled it was continuing to slow slightly in November, with manufacturing output slipping for a fourth straight month, even with consumption remaining firm.

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COMMODITIES
-5.88% -0.37% -4.61% -0.88%
Crude Oil WTI Natural Gas Crude Oil Brent Corn

1.94% 0.41% -0.92% -2.19%

Gold Silver Copper Sugar

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Oil plunges as supply rises

Oil extended the previous sessions losses as expectations for an increase in oil supply from Libya and concerns over a build-up in U.S. supplies drove prices lower. On the other hand, gold and silver extended the previous sessions gains over the week as robust physical demand from China and losses in equities markets bolstered demand for the precious metals.

US TREASUR Y YIELDS
Dec 30 US 3M US 1Y US 10 Y US 30 Y
0.066% 0.117% 2.972% 3.903%

Dec 31
0.068% 0.117% 3.026% 3.964%

Jan 01
0.073% 0.116% 3.026% 3.964%

Jan 02
0.068% 0.112% 2.991% 3.923%

Jan 03
0.063% 0.114% 2.998% 3.926%

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Carlos Pereira

Catarina Borges

David Novo

Jorge Rodrigues

Pratik Ashok

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