EUR 100.00 For Business Accounts Only

IBERIAN DAILY 17 JUNE (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ELECTRICITY SECTOR, EUSKALTEL, NH HOTELS.

MARKETS YESTERDAY AND TODAY

The Fed moves forward the rate rise to 2023
In a session marked by the Fed meeting, European stock markets ended the session with slight gains except for the IBEX and DAX although US indices fell after the Fed meeting. Within the Euro STOXX, the best-performing sectors were Travel & Leisure and Utilities (given the gains of renewables following the takeover bid on Solarpack), whereas the worst performers were Banks and Energy. On the macro side, the Fed was optimistic, raising growth and inflation forecast for 2021 significantly and moving forward the first rate rises (at least 2 of 25bps) to 2023 vs. 2024 previously. In the UK, May’s inflation rose more than expected. In the US, May’s real estate data was disappointing, with housing starts rising less than expected and building permits contracting more than expected, due partly to supply problems (the scarcity of available housing will continue to push prices upward). Separately, import prices rose more than expected. In the euro zone, as expected travel restrictions on US tourists were lifted, and Germany will lift mandatory teleworking at the end of June. In Spain, we learnt that the EU will cut the first item of 2021 recovery funds by 30%. In Brazil, the Central Bank raised the Selic interest rates by 75bps to 4.25%, as expected.
What we expect for today
The European stock markets would open with losses of around -0.5%. Currently, S&P futures are down -0.3% (the S&P 500 ended -0.51% lower vs. its price at the closing bell in Europe). Volatility in the US rose (VIX 18.15). Asian markets are mixed (China’s CSI +0.3% and Japan’s Nikkei -1%).
Today in Spain we will learn April’s trade balance, in the euro zone May’s final inflation and in the US weekly jobless claims and June’s Philadelphia Fed index. In debt auctions: Spain (€ 6 Bn in bonds due 2024, 2028 and 2037) and France (€ 12.25 Bn in bonds due 2025, 2027, 2028 and 2029 and I/L due 2025, 2031 and 2047).