Global Market Performance and Outlook

The European market had a predominantly bearish performance this week relative to the last. Following the heightened expectations of investors towards the further monetary stimulus by the ECB, investors were not impressed as the ECB maintained its monthly stimulus package of € 60bn and trimmed its deposit rate from -0.2% to -0.3%, against a much larger expectation. Consequently, the Euro soared relative to the dollar as investors who had anticipated a larger level of easing and had traded euros for dollars suddenly began exchanging their dollars for more euros. As investors adjusted their expectations in tandem with reality, the European stock markets experienced quick sell offs. On a W-o-W analysis, the UK FTSE declined 1.6%, France CAC fell 4.3% and the Germany XETRA DAX dipped 4.6%.

In response to the ECB decision, US Fed Chair Janet Yellen emphasized the need for an increase in interest rates as investors had expected more stimulus. Although the US S&P 500 fell 0.7% W-o-W as a bear market appears to be ongoing, investors' reaction to the US November Jobs Report has been positive given that it further cements the odds of the rate increase before the year runs out.

Amid political uncertainty due to speculations over the impeachment of Brazil's President Dilma Rousseff, the country's benchmark index, Ibovespa, declined 1.4% W-o-W. As news continues to spread about the delisting of the only gold producer from South Africa's JSE 40 index (AngloGold Ashanti Ltd), the continuous hassle over the MTN infractions, investors have resorted to tread cautiously in the South African Stock market thus the JSE/FTSE declined 4.6% WTD.

The performance of African markets within our coverage was in reverse to that of the previous week. The Nigeria ASI and Egypt EGX 30 advanced 5bps and 5.5% W-o-W respectively while the Ghana GSE and the Kenya NSE 20 declined 0.1% each.