EUR 100.00 For Business Accounts Only

IBERIAN DAILY 10 OCTOBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ALMIRALL, ELECTRICITY AND GAS SECTOR, UNICAJA.


MARKETS YESTERDAY AND TODAY


Markets take comfort in Powell’s speech
J. Powell’s statement, promising that the Fed will listen to the market (in a speech similar to the one he pronounced on 4 Oct, when he left the door open to cutting rates) encouraged earnings across Europe. Thus, within the Euro STOXX, almost all sectors closed with gains, led by Technology and Consumer Goods, whereas Utilities saw losses and Banks posted the smallest gains. On the macro side, in Spain, the Funcas consensus cut sharply its estimates for 2019 (1.9%) and 2020 (1.5%). In the Euro zone, J. C. Juncker confirmed that the Brexit talks are up and running, ruling out a last-minute agreement. From the ECB, L. de Guindos expressed satisfaction with the current interest rates, denying that inflation expectations are deflating. In the US, the Fed minutes do not rule out further cuts to rates, admitting macroeconomic deterioration due to the trade war, but members expressed concern on the market’s strong expectations on cuts. On another note, Secretary of Commerce W. Ross warned that China’s trade practices have worsened in the past few years. In this regard, recent news seems to suggest that a partial deal would include an agreement on currency policies and a possible delay in the tariff increases (expected for next week), although intellectual property remains a source of discrepancies and the Chinese delegation might leave the US earlier than expected. In Japan, machinery orders plummeted more than expected in August.
What we expect for today
The markets are rising slightly in a session that should be volatile in view of the uncertainty arising from the trade negotiations between China and the US. Currently, S&P futures are down -0.07% (the S&P 500 was up +0.12% vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 18.64%). The Asian markets that are open are rising (Hong Kong +0.42% and Japan +0.37%).
Today in Germany we will learn August’s trade balance, in the euro zone the minutes from the September ECB meeting and in the US weekly jobless claims and September’s inflation. Debt auctions: Italy (€ 6 Bn in 6M t-bills).