EUR 100.00 For Business Accounts Only

IBERIAN DAILY 20 JUNE (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: FCC, FERROVIAL, IBERDROLA, LOGISTA, NH HOTELES.

Strong correction in global stock markets
Last week was marked by the rapid hike in interest rates by the Fed and by recession fears from a macroeconomic point of view. In the Euro STOXX, almost all sectors ended in negative territory, with Insurance and Banks being the best relative performers whereas Retail and Energy (Brent crude dropped below US$ 115.00/barrel) saw the biggest drops. On the macro side, in the euro zone, May’s final inflation confirmed the preliminary data of 8.1%, as well as the core data at 3.8%. In France, with a high abstention, E. Macron finally lost the parliamentary majority to the left-wing coalition, the far-right obtaining its best result. In the US, May’s industrial output rose less than expected. The orders/inventory ratio of the manufacturing ISM suggests some slowdown in the industrial output over the next 6 months. On the monetary front, J. Bullard outlined that the Fed will manage a soft landing of the US economy while J. Powell reiterated the need of controlling inflation, and L. Mester warned that bringing inflation back to 2.0% will take a couple of years and that the risk of a recession is increasing. In China, the PBoC kept reference interest rates for 1Y and 5Y loans unchanged. On the geopolitical front, the reduction in natural gas supply is starting to be seen in the gas supply to France, Italy, Austria and Slovakia.
What we expect for today
European stock markets would see a slightly bearish opening, with the oil sector pricing in the significant correction in crude oil prices and French stocks affected by the legislative results. Currently, S&P futures are up +0.1% (the S&P 500 ended up +0.27% vs. the European closing bell). Volatility in the US rose (VIX 31.13). Asian markets are mixed (China’s CSI 300 +0.8% and Japan’s Nikkei -1.28%).
Today no relevant data will be released.