EUR 100.00 For Business Accounts Only

IBERIAN DAILY 11 APRIL + 1Q’24 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: CAF, GRIFOLS, REPSOL.

At the end of today’s report, and during the entire results season, we will include a presentation with positive and negative results highlights and previews for the 1Q’24 results to be released over the coming days in Spain.

Inflation rising
The surprising US inflation data led to strong widening on debt curves, which in turn brought losses on stock markets and sales of bond proxies. However, over the course of the afternoon, the recovery in banks led to slight gains. In the STOXX 600, Banks and Household Goods were the best performers, whereas Utilities and Real Estate (hit hard by the more expensive financing) ended with the biggest losses. On the macro side, in the US inflation rose in March to 3.5%, with the core figure remaining at 3.8% (above expectations in both cases). This led to fed fund futures pricing in less than -50bps of rate cuts in 2024 (4.96% as of Dec’24), with the probability of rate cuts in June plummeting to only 21.%. The Fed minutes did not bring relevant changes, most members continue to see rate cuts at some point in 2024 and moderation in QT despite the recent disappointment in inflation. On another note, the US 10Y bond auction worth US$ 39 Bn saw the worst result since Dec’22 and the third worst result in its history. In Brazil, March’s inflation fell slightly more than expected, despite the recent relaxation in monetary policy. In China, March’s inflation moderated more than expected whereas production prices continued to slow down by around -2.8% YoY.
What we expect for today
European stock markets would open with a slight bullish slant, underpinned by expectations that the ECB will end up diverging significantly from the Fed’s expected roadmap. Currently, S&P futures are up +0.12% (the S&P 500 ended up +0.18% vs. the European closing bell). Asian stock markets are mixed (China’s CSI 300 +0.21%, Japan’s Nikkei -0.37%).
Today the ECB will meet, in Brazil we will learn February’s retail sales and in Mexico February’s industrial output.


COMPANY NEWS

REPSOL. Good 1Q’24 trading statement thanks to refining margins. BUY.
Refining margins improved significantly on the quarter (up to US$ 11.40/b vs. US$ 9.00/b 4Q’24 vs. US$ 8.00/b guidance), whereas Brent crude prices fell slightly (to US$ 83.20/b, -1.3% vs. 4Q’23 vs. US$ 80.00/b guidance), as well as Henry Hub gas prices (to US$ 2.30/MBtu vs. US$ 2.90/MBtu and US$ 3.00/MBtu guidance). Output came in slightly below expectations due to Libya’s interruptions and Canada’s negative comparison (590kboe vs. 595kboe previously but in line with the annual guidance). For the 1Q’24 Results (25/04) we would assume around € 1.2 Bn of adjusted Net Profit, in line with the 4Q’23, -37% vs. 1Q’23 and above the consensus expectations (>10%, barely raised in the past month). We would expect a positive market reaction.