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Surprising macro resilience
European stock markets closed with slight drops after the surprising leading indicator data for the services sector and employment growth in November in the US underpinned the Fed’s strategy of toughening monetary policy despite the fears of recession next year. In the Euro STOXX, the gains in Basic Resources and Autos stood out on the positive side, whereas Consumer Goods and Pharma ended with the worst performance. On the macro side, in the euro zone November’s final aggregate PMI fell one tenth of a percent (48.5), despite the solid reading in Spain and Italy. In the Eurogroup’s meeting, von der Leyen announced a response to Biden’s plan against inflation through subsidies on the electric vehicle industry, batteries and renewable energies. From the ECB, P. Lane expects the inflation peak to be reached in 1Q’23 and is confident it will fall to 6-7% in 2023, warning of more rate hikes, although recognising the progress made this year. Separately, December’s Sentix investor confidence index improved more than expected, while October’s retail sales fell slightly more than expected. In the US, October’s factory orders rose more than expected, whereas November’s non-manufacturing ISM recovered unexpectedly to 56.5 with gains in the employment and activity headings. On another note, the final reading of core capital goods worsened by one tenth of a percent in October. Lastly, US and European authorities would be studying the possibility of placing new levies on Chinese steel and iron as part of the fight against CO2 emissions. In China, there was a press leak stating that the country would be readying an easing of Covid-19 restrictions, similar to the ones announced for Beijing, where it will not be necessary to take a Covid-19 test in order to access public spaces. In Australia, the BoA raised interest rates by +25bps (as expected), adding that from this point on it will be more flexible.
What we expect for today
European stock markets would open with losses, hit by the stronger likelihood of rate hikes in the short term. Currently, S&P futures are up +0.31% (the S&P 500 ended down -0.6% vs. the European closing bell). Volatility in the US rose (VIX 20.75). Asian markets are climbing (China’s CSI 300 +0.39% and Japan’s Nikkei +0.24%).
Today in Germany we will learn October’s factory orders, in Mexico September’s fixed investment and in the US October’s trade balance.
IBERIAN DAILY 06 DECEMBER (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: BANKING SECTOR, ELECTRICITY SECTOR.Surprising macro resilience
European stock markets closed with slight drops after the surprising leading indicator data for the services sector and employment growth in November in the US underpinned the Fed’s strategy of toughening monetary policy despite the fears of recession next year. In the Euro STOXX, the gains in Basic Resources and Autos stood out on the positive side, whereas Consumer Goods and Pharma ended with the worst performance. On the macro side, in the euro zone November’s final aggregate PMI fell one tenth of a percent (48.5), despite the solid reading in Spain and Italy. In the Eurogroup’s meeting, von der Leyen announced a response to Biden’s plan against inflation through subsidies on the electric vehicle industry, batteries and renewable energies. From the ECB, P. Lane expects the inflation peak to be reached in 1Q’23 and is confident it will fall to 6-7% in 2023, warning of more rate hikes, although recognising the progress made this year. Separately, December’s Sentix investor confidence index improved more than expected, while October’s retail sales fell slightly more than expected. In the US, October’s factory orders rose more than expected, whereas November’s non-manufacturing ISM recovered unexpectedly to 56.5 with gains in the employment and activity headings. On another note, the final reading of core capital goods worsened by one tenth of a percent in October. Lastly, US and European authorities would be studying the possibility of placing new levies on Chinese steel and iron as part of the fight against CO2 emissions. In China, there was a press leak stating that the country would be readying an easing of Covid-19 restrictions, similar to the ones announced for Beijing, where it will not be necessary to take a Covid-19 test in order to access public spaces. In Australia, the BoA raised interest rates by +25bps (as expected), adding that from this point on it will be more flexible.
What we expect for today
European stock markets would open with losses, hit by the stronger likelihood of rate hikes in the short term. Currently, S&P futures are up +0.31% (the S&P 500 ended down -0.6% vs. the European closing bell). Volatility in the US rose (VIX 20.75). Asian markets are climbing (China’s CSI 300 +0.39% and Japan’s Nikkei +0.24%).
Today in Germany we will learn October’s factory orders, in Mexico September’s fixed investment and in the US October’s trade balance.
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Sabadell
Research Department
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