EUR 100.00 For Business Accounts Only

IBERIAN DAILY 03 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACS, CAF, ELECTRICITY SECTOR.

Stock markets are hopeful
The stock markets recovered, closing with gains of around +2% after J. Powell reaffirmed that the Fed remains committed to fighting inflation and raising rates (by a quarter point in two weeks) despite the geopolitical situation. Powell confirmed that rates will be raised in March but that the balance sheet reduction will be conducted through maturities. The fact that several Russian oligarchs criticized the war in Ukraine in view of the high economic cost of sanctions also helped. Meanwhile, the ECB is analysing the possibility of suspending the debt and deficit ceilings again in 2023 in view of the possible impact from the war that will be assessed over the coming months. Within the Euro STOXX, the best-performing sectors were Energy (new oil rises) and Basic Resources whereas Utilities and Household Goods ended with the biggest losses. On the macro side, in Germany, unemployment fell more than expected in February. In the Euro zone, inflation rose above expectations in February to 5.8% YoY, whereas core inflation climbed to 2.7%. In the US, February’s ADP private employment survey showed much higher job creation levels than forecast by the consensus. In China, February’s Caixin services PMI dropped slightly less than expected. In US business results, Dollar Tree came in above expectations.
What we expect for today
European stock markets would open flat with a slight bearish slant with the Russian invasion intensifying and the risks on energy supply problems in the euro zone continuing unabated. Currently, S&P futures are up +0.1% (the S&P 500 yesterday ended 0.18% higher vs. the European closing bell). Volatility in the US rose (VIX 30.74). Asian markets are mixed (China’s CSI 300 -0.5%, and Japan’s Nikkei +0.7%).
Today we will learn in the Euro zone February’s final Services PMI and February’s unemployment rate, in the US, weekly jobless claims, February’s ISM non-Manufacturing index, non-farm productivity, 4Q’21 labour costs, January’s final capital goods orders and January’s factory orders. In US business results, Best Buy, Kroger, Broadcom and Costco Wholesale, among others, will release their earnings. In debt auctions: Spain (€ 5.5 Bn in bonds due 2025, 2029, 2042 (green bonds) and I/L bonds due 2033) and France (€ 10 Bn in bonds due 2032, 2045 and 2053).