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IBERIAN DAILY 19 JUNE (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACS, CELLNEX, IAG, IBERPAPEL.

MARKETS YESTERDAY AND TODAY

Fears of new outbreaks grip the markets
The emergence of several outbreaks in Germany, China and Portugal led to sell-offs on European markets, with the IBEX standing out once again (-1.2%) vs. the rest (Euro STOXX 50 -0.5%). In the Euro STOXX, the best-performing sectors were Travel & Leisure and Chemicals, whereas Industrials and Basic Materials had the biggest drops. On the macro side, in Spain, 4 of the 5 large banks requested the maximum amount allowed by the ECB in the TLTROs. In total, European banks have requested € 1.3 Tn in extraordinary liquidity. In the UK, the BoE’s interest rates meeting brought no surprises, with the rates being kept unchanged and with the QE increasing by £ 100 Bn to a total of £ 745 Bn. As a positive, A. Bailey admitted that there are signs that the impact from the pandemic could be “less severe” than what was initially feared. In the US, the Philadelphia Fed index for June rose more than expected (returning to positive territory), but weekly jobless claims rose more than expected, and the previous data was raised. Meanwhile, Covid-19 cases and mainly hospitalisations continue to increase in states of Arizona, Florida, Texas, California and South Carolina. In Japan, May’s inflation remained at the previous 0.1% YoY while the core inflation provided a negative surprise after remaining at the previous -0.2%.
What we expect for today
European stock markets would open flat and without a clear direction given the lack of drivers. Currently, S&P futures are up +0.17% (the S&P 500 closed practically flat vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 32.92%). Asian markets are trading with mixed results (Japan +0.69% and Hong Kong -0.07%).
Today the European Council will meet. In the UK we will learn May’s retail sales and in the US 1Q’20 current account balance.