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IBERIAN DAILY 14 JUNE (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ENCE, FERROVIAL, GRIFOLS, TOURISM SECTOR.

MARKETS YESTERDAY AND TODAY

The week ended with new rises on stock markets
It was yet another week of gains for the European stock markets (except for Germany’s stock market, which ended virtually flat, consolidating below its all-time highs of ~16,000). The week’s main catalysts were the ECB meeting, which kept the monetary policy unchanged, and C. L, who reiterated that despite the increased macro forecast and subsequent greater optimism the rise in inflation will be temporary, as well as May’s inflation data in the US, which climbed above expectations. Thus, within the Euro STOXX, the week’s best-performing sectors were Pharma and Travel & Leisure, whereas Chemicals and Banks were the worst relative performers. On the macro side, the session’s only reference came in the United Kingdom (a mixed bag), where the GDP rose more than expected in April and production levels came in below expectations. Separately, today B. Johnson would announce a 4-week delay in the deconfinement plan, which was expected to end on 21 June. The G7 pledged to donate 1 Bn Covid-19 vaccines to poor countries, work on a minimum tax of 15% and a green infrastructure initiative to counter the Chinese Belt & Road.
In currencies, the euro/dollar traded within the same sideways range of the past few sessions over the week (1.21/1.226) following the ECB meeting (currently at 1.21). In raw materials, Brent future increased once again, breaking through the technical level of US$ 72.00/barrel (2019’s highs) amid fears that the absence of investors for the renewal of wells might lead to a lack of crude oil in the next decade (currently at around 73.00). Gold broke through support levels of US$ 1,900/oz, driven by the performance of the US bond yield and the new rise in risk assets (currently at 1,870).
In fixed income, sovereign bond yields tightened over the week after a very dovish ECB meeting, with Germany’s falling by -6bps to -0.27%, Spain’s by -9bps to +0.35% and Italy’s by -10bps to +0.74%. In the US, the 10Y bond yield fell to March’21’s levels (+1.46%) despite the fact that inflation came in above expectations in the US and backed by falling inflation expectations, with ell eyes on this week’s Fed meeting.
What we expect for today
The European stock markets would open with slight gains in a week marked by the Fed meeting. Currently, S&P futures are up +0.1% (the S&P 500 ended 0.3% higher vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 15.65). Asian markets are mixed (China’s CSI -0.9% and Japan’s Nikkei +0.7%).
Today in the Euro zone, we will learn April’s industrial output, and in Brazil April’s economic activity index. In debt auctions: Germany (€ 4 Bn in 12M T-bills) and France (€ 6 Bn in 3M, 6M and 12M T-bills).

COMPANY NEWS

ENCE. BUY.
According to the press, the National High Court will make a decision on the validity of the extension in ENCE’s Pontevedra plant (43% of the company’s production capacity;