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IBERIAN DAILY 30 JUNE (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: IBERDROLA, REDEIA.

Lower trade and geopolitical risks
It was a week of gains on European stock markets, underpinned by the ceasefire between Israel and Iran and the expectations of a trade agreement with the US. Thus, in the STOXX 600, the best-performing sectors on the week were Construction and Travel & Leisure, whereas Food and Energy ended with the biggest drops. On the macro side, in the euro zone June’s economic confidence index worsened unexpectedly. In Spain, June’s preliminary inflation rose more than expected to 2.2%, whereas the core figure remained at 2.2% from the previous month, and retail sales rose in May. In the US, personal outlays contracted unexpectedly and the core consumption deflator (PCE) rose more than expected to 2.7% YoY. Lastly, the U. Michigan confidence index for June was raised very slightly. On the geopolitical front, progress was made on a trade agreement for China to approve requests for rare earth metal exports in exchange for the US lifting some trade restrictions. Separately, the Senate has moved forward with the budget law which, in its new format (according to the CBO) suggests an additional US$ 3.3 Tn of debt in 10 years (vs. the previous US$ 2.5 Tn). In Brazil, May’s unemployment rate fell more than expected. In China, June’s manufacturing PMI and services PMI rose slightly more than expected, with orders performing well. In Japan, May’s industrial output recovered less than expected MoM. In trade matters, Canada eliminated the tax on digital services in order to move forward in negotiations with the US.
What we expect for today
European stock markets would open with gains of around +0.3%. Currently, S&P futures are up +0.4% (the S&P 500 ended flat vs. the European closing bell). Asian markets are rising (China’s CSI 300 +0.1% and Japan’s Nikkei +0.9%).
Today in Germany we will learn May’s import prices and retail sales and June’s preliminary inflation, in the UK the 1Q’25 GDP, in the euro zone May’s M3 and in the US June’s Chicago PMI.