EUR 100.00 For Business Accounts Only

IBERIAN DAILY 13 OCTOBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA, ACCIONA ENERGÍA, FERROVIAL.

Misdirection from the Bank of England
The main European stock markets felt the fears of stagflation brought on by the IMF’s new forecasts and the sharp rise in sovereign yields, with new drops in peripheral debt. By sectors, Consumer Goods and Chemicals were the best performers, with Real Estate and Travel & Leisure posting the biggest drops. On the macro side, in the US the Fed meeting minutes brought no big surprises, once again showing that the organisation’s members prioritise lowering inflation, although some are beginning to see the need to calibrate the pace of rate hikes in order to mitigate the impact on growth. Meanwhile, September’s production prices rose more than expected (although not the underlying figure), meaning more pressure for today’s inflation data release. In the euro zone, August’s industrial output beat expectations. In the UK, following the initial confusion on a possible extension to the bond purchase programme in order to calm the markets, the BoE announced the end of the programme on 14 October, leading to new rises in debt yields, worsened by the Government’s reiterating that it will continue the current fiscal policy. Meanwhile, OPEC cut oil demand growth to 2.64 mb/d from the previous 3.1 mb/d, but it still expects demand to exceed pre-pandemic levels in 2023. In Spain, the IMF forecast a deficit of 4% until 2027 vs. the Govt.’s estimate of 2.9% in 2025. Separately, the OPEC cut crude oil demand growth for 2022 to 2.64 mb/d (+2.7% vs. 2021) from 3.1 mb/day previously, but still expects it to exceed pre-pandemic levels in 2023 (with 2.35% growth). On another note, Brussels continues to study a way to temporarily limit the price of gas, but it warns that this will be conditioned to a -15% reduction in consumption.
What we expect for today
The European stock markets would open with slight gains that might speed up following the US inflation data, with a good performance of airlines (robust results from Qantas) and technology stocks (good news from TSMC’s results). Currently, S&P futures are up +0.12% (the S&P 500 ended -0.73% lower vs. the European closing bell). Volatility in the US rose (VIX 33.57). Asian markets are falling (China’s CSI 300 -0.5% and Japan’s Nikkei -0.53%).
Today in the US we will learn September’s inflation and jobless claims and in Germany September’s inflation. Debt auctions: Italy (€ 8.75 Bn in bonds due 2026, 2029, 2038 and 2039).