EUR 100.00 For Business Accounts Only

IBERIAN DAILY 19 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ELECTRICITY SECTOR, INDRA.

The Fed maintains the cut for 2026 but remains cautious
After two sessions of gains stock markets fell again at both sides of the Atlantic, dragged down by the hike in crude oil prices (above US$ 110.00/b) following new attacks in the Persian Gulf that renewed fears of higher inflation and lower growth. In the STOXX 600, with the exception of banks, energy and industrials all sectors ended with drops, led by defensive industries such as Food and Utilities. On the macro side, in the euro zone, February’s final inflation was cut one tenth to 0.6% in MoM terms but remaining at 1.9% YoY (2.4% core data). In the US, as expected the Fed left interest rates unchanged at 3.5-3.75%, keeping the -25bps cut expected for 2026 and another one for 2027 although J.Powell warned that if inflation does not continue to converge to the target no further cuts will be implemented. Meanwhile February’s production prices rose above expectations to the highest level since July’25. In Brazil, the Central Bank cut the Selic benchmark rate by -25bps to 14.75% vs. 14.5% expected. In Japan, January’s machinery orders fell much less than expected and industrial output recovered more than expected. Meanwhile, without unanimity, the JoP kept the benchmark interest rate unchanged but also left the door open to rises going forward and warned about the upward risks of inflation in view of the energy shock. In geopolitics, after Israel’s attack (apparently without D. Trump’s awareness) to the largest natural gas field in Iran (South Pars), Iran attacked Qatar’s LNG plant Ras Laffan that was seriously damaged and the country threatened to attack facilities in Saudi Arabia, the Emirates and Qatar. Meanwhile, Abu Dhabi suspends operations in the gas plant of Habhsan. On another note, the Pentagon will request the Congress € 200 Bn, which could mean the incursion in Iran with troops.
What we expect for today
European stock markets would open with drops >-1.0%, with the oil sector acting as safe haven. Currently, S&P futures are down -0.1% (the S&P 500 ended flat vs. the European closing bell). Asian markets are sliding (China’s CSI 300 -1.3%, Japan’s Nikkei -3.5% and South Korea’s Kospi -2.6%).
Today the ECB and BoE will hold their interest rate meetings. In the UK we will learn January’s ILO unemployment rate and February’s number of unemployed, in the US March’s Philadelphia Fed index, weekly jobless claims, housing starts and January’s building permits.