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IBERIAN DAILY 25 SEPTEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ELECTRICITY SECTOR, IAG.

Week in the red after Central Bank meetings
On Friday, the poor PMI data on both sides of the Atlantic put a halt to the widening in yield curves, which aided recovery on European indices. Over the course of the week, in the Euro STOXX there was widespread selling (18 sectors out of 20 in the red), led by Travel & Leisure and Consumer Goods, whereas defensive sectors like Telecoms and Banks (benefiting from the rising rates) were the only ones in positive numbers. On the macro side, in Europe September’s manufacturing PMI fell unexpectedly, whereas the services PMI rose slightly more than expected, although both suggest a contracting GDP. From the ECB, the vice-president Luis de Guindos was less confident of a quick rise in inflation and now sees more balanced risks. In Spain, the final 2Q’23 GDP improved upon the preliminary data by +0.1%, showing growth of 2.2% YoY. On the political front, the Govt. would be considering a withdrawal of the taxes on gas and electricity according to the budget plan sent to Brussels. In the UK, retail sales contracted more than expected in August. In the US, the manufacturing PMI recovered more than expected, while the services component fell unexpectedly. In Mexico, July’s IGAE economic activity index slowed more than expected.
What we expect for today
European stock markets would open with a slight bearish slant that would turn around over the course of the session. Currently, S&P futures are up +0.25% (the S&P 500 ended down -0.61% vs. the European closing bell). Volatility in the US rose (VIX 17.20). Asian stock markets are mixed (China’s CSI 300 -0.53%, Japan’s Nikkei +0.80%).
Today in Germany we will learn September’s IFO and in the US August’s Chicago Fed index.