EUR 100.00 For Business Accounts Only

IBERIAN DAILY 28 DECEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: CAIXABANK, FLUIDRA, MEDIA SECTOR.

Concerns about inflation in China’s reopening
European stock markets saw generalised gains, underpinned by China’s reopening and the end of its zero-Covid policy starting on 08/01. In this regard, in addition to the elimination of the quarantine period, business trip, study or family visit visas will be easier to obtain with an orderly opening to external tourism. Thus, the Euro STOXX climbed +0.42%, with the core sector outperforming the peripheral segment. The best-performing sectors were Consumer Goods and Energy, whereas Technology and Real Estate were the worst performers. On the macro side, in the US, wholesale inventories came in better than expected whereas the Dallas Fed was below expectations. In Spain, the third package of measures worth € 10 Bn was announced by the administration in order to alleviate the persistent inflation, with tax exemptions for an additional 6-month period on energy and gas, a direct aid package worth € 4.2 to low-income families (€ 200 M cheque) and a VAT cut in staple foods. The end to the general discount in petrol was also decided, focusing on transport and farming sectors, also curbing the rise in rental prices by 2% until the end of 2023. A rise in non-contributory pensions of 15% and 8.5% in contributory pensions was also approved. In Japan, the BoJ carried out unplanned 2, 5 & 10Y bond purchases in order to curb the return of the curve under pressure by inflation.
What we expect for today
European stock markets would open with slight drops amid concerns about new inflationary pressure due to China’s reopening and new widening in sovereign yields. Currently, S&P futures are down -0.41% (the S&P 500 ended -0.30% lower vs. the European closing bell). Volatility in the US rose (VIX 20.65). Asian markets are sliding (China’s CSI 300 -0.49% and Japan’s Nikkei -0.41%).
Today in the US we will learn weekly mortgage requests, 30Y mortgage rate, November’s pending home sales and December’s Richmond manufacturing index.