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IBERIAN DAILY 19 AUGUST (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACS.

MARKETS YESTERDAY AND TODAY

Doubts remain on the European stock markets
The European stock markets saw a mixed performance amid doubts over the global economic recovery and awaiting the next moves in monetary policy. Thus, the Euro STOXX fell by -0.17%, driven by sectors linked to Consumption and Luxury Goods, vs. the drops posted by defensive sectors such as Utilities or Household Goods. On the macro side, in the US, the real estate data were a mixed bag, with July’s housing starts coming in worse than expected and construction permits somewhat above expectations. Separately, the Fed minutes showed that a majority of members pointed out that it would be appropriate to being reducing bond purchases this year provided that economic developments are favourable. Moreover, inflation is expected to stand far above this year’s 2% figure, although they reiterate that this rise in temporary and due to limitations in supply and supply channels (for 2022, it is expected to fall below 2%). In the Euro zone, July’s final CPI came in as expected: -0.1% on a monthly basis and 2.2% YoY. On the geopolitical front, the Taliban increased control at Kabul airport to prevent the departure of Afghans as the first refugees arrived in neighbouring countries such as Albania or North Macedonia.
What expect for today
The European stock markets would end with losses once again amid doubts on the recovery, the poor performance of Asian markets and the timing in the withdrawal of stimulus showed by the Fed minutes.
Currently, S&P futures are down -0.10% (the S&P 500 ended -0.90% lower vs. its price at the closing bell in Europe). Volatility in the US increased sharply to 30-day’s highs (VIX 21.57). Asian markets are falling (China’s CSI -1.50% and Japan’s Nikkei -0.67%).
Today we will learn in the US August’s Philadelphia Fed index and the weekly jobless claims. In debt auctions: France (€ 8 Bn in bonds due 2024, 2026, 2027 and I/L due 2028 and 2029).