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IBERIAN DAILY 12 APRIL (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: NEINOR HOMES.


MARKETS YESTERDAY AND TODAY

Market consolidation
The European indices consolidated throughout the week at levels slightly below their new highs, underpinned by the dovish messages from the Fed and ECB minutes, which revealed that both institutions will maintain a lax monetary policy and the ongoing stimulus programmes until there is more visibility on economic recovery, impacted by the Covid-19 pandemic. Within the Euro STOXX, Consumer Goods and Food led gains, whereas the worst relative performers were Energy and Telecommunications. On the macro side, Germany’s and France’s industrial output fell by -1.6% and -4.7%, respectively, QoQ in February, vs. market expectations of +1.5% and +0.5% growth, respectively. In Spain, the Govt. revised its GDP estimate for 2021 from 9.8% to 6.5% (with a drop expected in 1Q) and to +7% for 2022. These revised estimates are more in line with the forecasts from other institutions for 2021, but are still more positive for 2022 (and, in any case, far below the numbers used to produce the budget). In the US, production prices increased above expectations YoY, which fuelled the long tranche of the debt curve temporarily. Separately, the Fed’s President, J. Powell, expressed optimism as regards the recovery of the US economy, but warned on the risk of Covid-19 cases increasing, as is now happing in states like Michigan. In Brazil, March’s inflation climbed less than expected.
What we expect for today
European stock markets would see a slightly bearish opening, with growth performing better on stable interest rates and with the Basic Resources sector affected by falling raw materials prices.
Currently, S&P futures are down -0.3% (the S&P 500 ended up +0.52% vs. its price at the closing bell in Europe). Volatility in the US dropped (VIX 16.69). Asian markets are falling (China’s CSI 300 -1.3% and Japan’s Nikkei -0.6%).
Today in the euro zone we will learn February’s retail sales. As for auctions, Germany will issue € 2 Bn in 6M T-bills and France € 5.4 Bn in 3, 6 &12M T-bills.