EUR 100.00 For Business Accounts Only

IBERIAN DAILY 04 OCTOBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACS, GRIFOLS, INSURANCE SECTOR.

US and UK markets fuelled Europe
The last quarter of the year got off to a good start thanks to the sharp drop in long-term rates and despite the uncertainties surrounding the OPEC+ meeting to be held next Wednesday where oil output could be cut significantly. Thus, in the Euro STOXX, Energy and Basic Resources were the best-performing sectors, whereas Consumer Goods and Food ended with the worst relative performance last week. On the macro side, in the euro zone, September’s final manufacturing PMI was cut slightly due mainly to France and Germany whereas in Spain it fell again to 49 vs. 49.9 previously. At the Eurogroup meeting, it was agreed that an expansionary fiscal policy cannot be expected in 2023, and that the monetary policy must focus on helping the vulnerable. In Spain, the Govt. raised its GDP’22 estimate to 4.4% (vs. 4.3% previously) and cut its forecast’23 to 2.1% (from 2.7% and vs. between 1.6% and 2% consensus and international bodies). In the US, the manufacturing ISM dropped more than expected to the lowest level since May’20 (orders and employment below 50), suggesting growth below 1.4% q/qa expected by the consensus in the 3Q’22. On another note, August’s construction expenses slowed down more than expected. In the UK, the government will rectify the tax programme announced last week following the market turmoil. In Japan, Tokyo’s inflation climbed in September in line with expectations to 2.8% YoY. From the geopolitical front, for the first time in the last five years, North Korea launched a missile over Japan, causing the suspension of different activities in the latter.
What we expect for today
European stock markets would open with gains of around +1.0% and with the positive relative performance of growth. Currently, S&P futures are up +0.89% (the S&P 500 ended +0.74% higher vs. the European closing bell). Volatility in the US dropped (VIX 30.00). Asian markets are rising (China’s CSI 300 closed and Japan’s Nikkei +2.8%).
Today in the euro zone the Ecofin will meet. In Spain we will learn September’s unemployment. As for auctions, Spain will issue € 5 Bn in 6 & 12M T-bills and Germany € 400 M in inflation-linked bonds due 2033.