EUR 100.00 For Business Accounts Only

IBERIAN DAILY 03 OCTOBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: BBVA, CAIXABANK, ELECTRICITY SECTOR, NATURGY, TELEFÓNICA.

Last week was marked by the Bank of England’s intervention
European stock markets saw drops last week, marked by the intervention of the Bank of England, which will purchase long-term public debt over the coming days to stabilise the market. This was followed by the hawkish stance of some Fed and ECB members reiterating their intention of further monetary tightening, which continued to mark the performance of stock exchanges. Thus, the Ibex35 ended the week down around -3%, below the 7,500-point level whereas in the Dax and the Euro STOXX 50 drops reached around -2%. In the Euro STOXX, Energy and Travel &Leisure were the best-performing sectors, whereas Banks and Utilities ended with the worst relative performance last week. On the macro side, in the euro zone, inflation exceeded expectations and hit a new record high in September (-10%), reinforcing expectations of a new rise in interest rates of 75bps by the European Central Bank in October, while August’s unemployment rate was in line with expectations. In the US, August’s personal outlays rose slightly more than expected whereas the core personal consumption deflator climbed more than expected. In Japan, the manufacturing Tankan fell more than expected in the 3Q whereas the non-manufacturing Tankan climbed unexpectedly. In Brazil, Lula da Silva won the presidential elections although he will have to face Bolsonaro in a second round. On the geopolitical front, OPEC+ is analysing a cut in crude oil production by 1mb/d at the meeting to be held next Wednesday to preserve reserves and keep high prices.
What we expect for today
European stock markets would open flat with some bearish bias and with oil companies benefiting from the announcement of a possible production cut by OPEC+. Currently, S&P futures are down -0.1% (the S&P 500 ended virtually flat on Friday vs. the European closing bell). Volatility in the US dropped (VIX 31.38). Asian markets are rising (China’s CSI 300 closed and Japan’s Nikkei +0.55%).
Today in the EMU we will learn September’s manufacturing PMI and the Eurogroup will hold a meeting, in the US September’s manufacturing ISM. As for auctions, Germany will issue € 5.4 Bn in 3, 6 & 12M T-bills.