EUR 100.00 For Business Accounts Only

IBERIAN DAILY 18 AUGUST (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: IAG, TELEFÓNICA.

The Fed eases pressure on rates
Despite opening with slight gains, stock markets ended up turning around, closing with losses of more than -1% in most cases amid growing nervousness ahead of the release of the Fed minutes. However, the minutes showed growing concern among Fed members about excessive monetary policy tightening and the need to ease the pace of hikes at a given moment, although, on the other hand, there is also the risk that price expectations are not met, thus damaging the Fed’s credibility. Thus, following the release of the Fed minutes, expectations are rising that the next hike will be +50bps instead of +75bps, as the market was pricing in. Thus, within the Euro STOXX, all sectors ended in the red, although losses were marginal in Energy, Food, Consumer Goods and Household Goods, and much more significant in Retail and Real Estate. On the macro side, in the Euro zone, the 2Q’22 GDP slowed a little more than expected. In the United Kingdom, July’s inflation rose more than expected, reaching for the first time levels above 10%. In the US, July’s retail sales also disappointed, stagnating due to the Auto and petrol components. On the geopolitical front, the US and Taiwan have reportedly begun to negotiate a trade agreement, which could again increase tensions with China. In US business results, Lowe’s and Cisco Systems were in line with expectations.
What we expect for today
The European stock markets would open with slight gains. Currently, S&P futures are down -0.7% (the S&P 500 ended +0.4% vs. the European closing bell). Volatility in the US was largely unchanged (VIX 19.9). Asian markets are falling (China’s CSI 300 -0.9% and Japan’s Nikkei -0.6%).
Today we will learn in the US the Philadelphia Fed index for August, July’s second-hand home sales and weekly jobless claims, and in the Euro zone July’s final inflation figure. In US business results, Estée Lauder, among others, will release its earnings. In debt auctions: France will issue 3Y, 5Y and 10Y bonds.