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All eyes on the Fed and Iran
It was a volatile session on European stock markets, which despite a bullish opening, ended in the red after the supreme leader of Iran, Ayatollah Ali Khamenei, rejected the unconditional surrender demanded by Trump. Peripheral nations managed to avoid the drops (IBEX 35 +0.1% and MIB +0.1%), boosted by banks in view of the possibility of higher rates due to the rally in crude oil prices. In a STOXX 600 dominated by drops (only 5/20 sectors in positive numbers), Real Estate and Banks led the gains, with Pharma and Chemicals falling the most. On the macro side, in the UK inflation fell in line with expectations, whereas in the euro zone general and core inflation confirmed the preliminary data (1.9% and 2.3% YoY, respectively). In the US, weekly jobless claims fell in line with expectations, and both building permits and housing starts for May contracted much more than expected. The Fed kept Fed Fund rates unchanged, as expected, in the range of 4.25%-4.50%, and it continues to expect 2 rate cuts in 2025 and 1 in 2026, but eliminating the single cut expected in 2027. Moreover, it lowered the GDP estimate for 4Q’25 to 1.4% YoY (vs. the previous 1.7%) and raised that of inflation to 3.0% from the previous 2.7%. In Brazil, the Central Bank decided to maintain the Selic reference rate at 14.75%, as expected. In Japan, the Govt. plans to cut ultra-long bond issuances by -10% to alleviate upward pressure on rates.
What we expect for today
European stock markets would open with losses of around -0.5%, with cyclicals performing worse in view of the rising geopolitical risk, where Trump could approve an attack on Iran next week. Currently, S&P futures are down -0.3% (the S&P 500 ended down -0.4% vs. the European closing bell). Asian markets are falling (China’s CSI 300 -0.7% and Japan’s Nikkei -0.9%).
Today in the UK the BoE will meet.
IBERIAN DAILY 19 JUNE (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: ARCELORMITTAL, ELECTRICITY SECTOR.All eyes on the Fed and Iran
It was a volatile session on European stock markets, which despite a bullish opening, ended in the red after the supreme leader of Iran, Ayatollah Ali Khamenei, rejected the unconditional surrender demanded by Trump. Peripheral nations managed to avoid the drops (IBEX 35 +0.1% and MIB +0.1%), boosted by banks in view of the possibility of higher rates due to the rally in crude oil prices. In a STOXX 600 dominated by drops (only 5/20 sectors in positive numbers), Real Estate and Banks led the gains, with Pharma and Chemicals falling the most. On the macro side, in the UK inflation fell in line with expectations, whereas in the euro zone general and core inflation confirmed the preliminary data (1.9% and 2.3% YoY, respectively). In the US, weekly jobless claims fell in line with expectations, and both building permits and housing starts for May contracted much more than expected. The Fed kept Fed Fund rates unchanged, as expected, in the range of 4.25%-4.50%, and it continues to expect 2 rate cuts in 2025 and 1 in 2026, but eliminating the single cut expected in 2027. Moreover, it lowered the GDP estimate for 4Q’25 to 1.4% YoY (vs. the previous 1.7%) and raised that of inflation to 3.0% from the previous 2.7%. In Brazil, the Central Bank decided to maintain the Selic reference rate at 14.75%, as expected. In Japan, the Govt. plans to cut ultra-long bond issuances by -10% to alleviate upward pressure on rates.
What we expect for today
European stock markets would open with losses of around -0.5%, with cyclicals performing worse in view of the rising geopolitical risk, where Trump could approve an attack on Iran next week. Currently, S&P futures are down -0.3% (the S&P 500 ended down -0.4% vs. the European closing bell). Asian markets are falling (China’s CSI 300 -0.7% and Japan’s Nikkei -0.9%).
Today in the UK the BoE will meet.
Underlying
ArcelorMittal
Provider
Sabadell
Research Department
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