EUR 100.00 For Business Accounts Only

IBERIAN DAILY 06 JULY (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: EUSKALTEL, FERROVIAL REPSOL.

MARKETS YESTERDAY AND TODAY

Slight gains with the US closed
The session began with losses on the markets, but following the release of the final Services PMI in the euro zone, the indices turned around and ended the session with gains, with peripheral indices (MiB and IBEX) leading the way. The best-performing sectors in the Euro STOXX were Banks and Basic Materials, whereas Pharma and Media were the worst relative performers. On the macro side, in the euro zone June’s Services PMI was raised (to a 15-year high), with the strong increase in Spain standing out on the regional level (62.5 vs. 59.4 previously) vs. the unexpected drop in Germany (57.5 vs. 60.4). Separately, July’s Sentix index rose less than expected. Meanwhile, Germany would ease its access restrictions to the UK, India, Portugal and Russia, not considering them regions of worrying variants. In the UK, Boris Johnson announced that social and economic restrictions will end on 19 July (the restaurant industry will reopen, and social distancing and face masks will no longer be mandatory) and in principle fully vaccinated citizens will be free to travel outside of the country starting on the 26th of July. In Turkey, inflation increased more than expected to 17.5% YoY, hitting its 2-year highs. Lastly, the OPEC+ ended its meeting without an agreement, which would keep production levels unchanged.
What we expect for today
European indices would open flat once more with a good performance of the tourism sector given the successive easing of restrictions, and basic resources following the new hike in iron ore. Currently, S&P futures are down -0.05% (the S&P 500 was closed for holiday). Asian markets are trading with mixed results (China’s CSI -0.55% and Japan’s Nikkei +0.3%).
Today in the Euro zone we will learn May’s retail sales, in Spain May’s industrial output, in Germany May’s factory orders and July’s ZEW index and in the US June’s services ISM. In debt auctions: Spain (€ 6 Bn in 6M and 12M t-bills) and Germany (€ 600 M in I/L bonds due 2033 and 2046).