EUR 100.00 For Business Accounts Only

IBERIAN DAILY 15 DECEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA ENERGÍA, ALMIRALL, BANKING SECOR, ENDESA, CAIXABANK, CELLNEX, REPSOL.
The Fed halted the pace of rate rises, as expected
Slight drops in global stock markets ahead of the Fed meeting and J. Powell’s statement, with the Ibex 35 ending flat. Thus, within the Euro STOXX, Retail and Real estate led gains, vs. the biggest drops in Basic Resources and Household Goods. On the macro side, in the Euro zone, the industrial output slowed less than expected in October. In Spain, November’s final inflation figure was unchanged at 6.8%, whereas in the United Kingdom, it moderated more than expected to 10.7%. In the US, the Fed raised rates by +50bps, as expected, leaving the range at 4.25%-4.50%, and expecting the effects from such hawkish moves to be seen on the economy. The dots of the Fed members suggest rates peaking in 2023 at 5.125% (+0.5bps vs. previous level) to later ease 100bps in 2024 and another 100bps in 2025 although J. Powell made clear that no cuts will be considered as long as inflation fails to converge to 2%. The hawkish message continued in the statements made later, making it clear that the priority is the stability of prices vs. a recession although the economy is giving signs of resilience. On another note, the growth forecast for 2023 was cut to 0.5% (-0.7pp), raising inflation prospects to 3.1% (+0.3pp). In China, industrial output and November’s retail sales came in worse than expected due to the impact from lockdown. The PoBC added new financing lines worth € 150 Bn, the largest liquidity injection since March.
What we expect for today
European stock markets would open with drops after the Fed focused on the control of prices vs. growth. Currently, S&P futures are flat (the S&P 500 ended -1.17% lower vs. the European closing bell). Volatility in the US fell (VIX 20.63). Asian markets are mixed (China’s CSI 300 +0.1% and Japan’s Nikkei -0.4%).
Today the ECB, BoE, Bank of Mexico and the European Council will meet, and in the US we will learn retail sales and industrial output for November.