EUR 100.00 For Business Accounts Only

IBERIAN DAILY 25 NOVEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ATRESMEDIA, ELECTRICITY SECTOR.

Euro STOXX 50 about to reach 4,000-point level
The European stock markets continued to regain lost ground after the latest Fed/ECB minutes backed the idea of lower rate hikes at the end of the year. Thus, the Euro STOXX ended up +0.7%, with all sectors in the black. Real Estate and Utilities led gains, whereas Technology and Basic Resources were the worst relative performers. On the macro side, in Germany, November’s IFO improved more than expected, mainly thanks to the expectations component, and despite the improvement from September’s lows, the current levels are still low and hint at a significant contraction in activity in 4Q’22. In the Euro zone, the minutes of the ECB meeting held on 27 Oct showed that some members backed an increase of “only” +50bps, although the majority decided on a +75bps rise. With this in mind, the ECB will likely raise rates by +50bps in December due to the deterioration of activity, although some members have expressed concern about the rise in core inflation vs. September’s expectations. On another note, the Bank of Sweden raised the reference interest rate by 75bps and conveyed a hawkish message despite the sharp drop in the residential sector. Lastly, Turkey cut the benchmark interest rate by -150bps as expected to 9.0%, leaving the real rate at ~75%, adding pressure on the Turkish lira. In Spain, the Govt. approved the 2023 Budget, with the highest spending in history (€ 198 Bn).
What we expect for today
European stock markets would open flat with some bullish bias. Currently, S&P futures are flat (the S&P 500 was closed for the Thanksgiving holiday). After the US holiday, volatility will begin trading from VIX 20.40. Asian markets are mixed (China’s CSI 300 +0.57% and Japan’s Nikkei -0.35%).
Today we will learn in Germany the final 3Q’22 GDP and in Mexico the final 3Q’22 GDP and September’s IGAE activity index.