EUR 100.00 For Business Accounts Only

IBERIAN DAILY 28 JUNE (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ALMIRALL, ELECTRICITY SECTOR, SACYR, TELEFÓNICA.

IBEX back above 9,300
European indices continued to rise, underpinned by those with higher weight in financials, such as the Ibex after C. Lagarde hinted at new rate rates. In the Euro STOXX, Banks and Insurance led the gains, with Energy and Pharma falling the most. On the macro side, in the euro zone, the ECB chair, C. Lagarde insisted that getting inflation back to 2% is the commitment “no matter what”, concerned about the wage pressures (still in negative territory in March at 5.1% vs. 6.1% inflation) and the recovery of business margins, which could increase inflation to 3% in 2025. Additionally, she confirmed that rates will be raised again in July by +25bps, leaving the door open to another rise in September and suggesting we have not hit the top of the cycle. In Spain, the Govt. extended an aid and tax cut package totaling € 9 Bn for the second half of the year, including the VAT cut for food and transportation. In the US, May’s new home sales and June’s Conference Board consumer confidence rose more than expected, with June’s Richmond manufacturing index recovering more than expected. In Brazil, the Central Bank’s meeting minutes showed the possibility of interest rates being lowered in the upcoming August meeting. In China, business profits slowed down at a higher pace in June, underscoring the weak demand and deflation in domestic industries.
What we expect for today
We expect current trends to continue, where European indices would open with around +0.5% gains awaiting news on the Central Banks’ speeches. Currently, S&P futures are down -0.18% (the S&P 500 ended up +0.45% vs. the European closing bell). Volatility in the US rose (VIX 15.60). Asian stock markets are mixed (China’s CSI 300 -0.60%, Japan’s Nikkei +1.65%).
Today J. Powell will speak at the Sintra forum. In the euro zone we will learn May’s M3 and in Spain May’s retail sales. Debt auctions: Italy (€ 4 Bn in 6M and 12M t-bills).