EUR 100.00 For Business Accounts Only

IBERIAN DAILY 09 DECEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: BANKINTER.


MARKETS YESTERDAY AND TODAY

With all eyes on the number of infections, vaccines, Brexit and the US fiscal stimulus package
Both France and Germany are studying the possibility of extending/toughening Covid-19 restrictions as the number of infections continues to increase in the two countries, and this data is also negative in the US (where the FDA might approve Pfizer’s vaccine today). Meanwhile, expectations cooled of a fiscal agreement being reached in the US before the end of the year until Treasury Secretary S. Mnuchin presented a US$ 0.9 Tn proposal in Congress, which boosted the S&P 500 to new record highs. As for Brexit, the EC is mulling the possibility of resuming the negotiations with the United Kingdom after the latter’s effective withdrawal on 31 December 2020. Does this mean that they no longer expect an agreement before 31 Dec 2020? What will happen in the meantime? Will measures be implemented to prevent potential chaos in the English Channel? At least, B. Johnson has taken a step in the right direction after dropping the internal market clause, which infringed the agreements previously made with the EU on the Irish border issue, and will visit Brussels today in an attempt to unblock the deadlock. All this notwithstanding, the stock markets ended virtually flat. Within the Euro STOXX, on the sector level, Media stood out, vs. the big drops posted by Leisure and Retail (mobility restrictions during Christmas). On the macro side, in the Euro zone, the Zew index climbed above expectations and the final 3Q’20 GDP was raised by a tenth of a percent. In the US, non-farm productivity and unit labour costs also came in above expectations. Early this morning in Japan, October’s machinery orders increased unexpectedly, whereas the M2/M3 supply also came in above expectations in November. In China, production prices fell more than expected in November.
What we expect for today
We expect the European stock markets to see a slightly bullish opening. Currently, S&P futures are up +0.2% (the S&P 500 closed +0.11% higher vs. its price at the closing bell in Europe). Volatility in the US dropped (VIX 20.68). Asian markets are mixed (CSI 300 -0.6%, Japan +1.3%).
Today in Germany we will learn October’s trade balance, in the US October’s final wholesale inventories and in Brazil CB meeting. On the primary fixed income market, Germany will issue bonds due 2022 (€ 3 Bn) and Italy T-bills (€ 6 Bn).