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IBERIAN DAILY 14 JULY (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: NEINOR HOMES.

This week we start with the 30% tariffs on Europe and Mexico
Last week the markets continued to monitor the uncertainty stemming from the tariff war initiated by the US, although with a degree of complacency after the EU anticipated a slightly worse deal than the one signed with the UK, which would include a generalized 10% tariff. Additionally, there were new threats from Donald Trump to impose a 35% tariff on Canada (vs. the current 25% on products not complying with the treaty) and 50% on copper and on Brazil starting on 01 August. In the STOXX 600, the best-performing sectors were Autos and Basic Materials, while Media and Real Estate led the drops during the week. On the geopolitical front, Trump stated he would provide weapons to Ukraine, but through NATO (which would bear the cost). He also announced an important statement regarding Russia to be made today. On the macro side, in the UK the quarterly GDP and May’s industrial output figures came in worse than expected. In France, June’s inflation rose more than anticipated, bringing the annualized rate to 1.0%. Separately, the Govt. announced that it will raise defence spending to € 64 Bn for 2027 vs. 2029 forecast previously (€ 3.5 Bn and € 3.2 Bn increase in 2026 and 2027). In Japan, May’s machinery orders fell less than expected. In China, June’s trade surplus was higher than expected thanks to the more dynamic exports and the weak recovery in imports. In trade matters, Donald Trump announced that he sent notifications to Europe (because it did not remove tariff barriers) and Mexico (because it did not slow the movement of fentanyl into the US).
What we expect for today
European stock markets would open with losses of around -1.0%, with cyclicals performing worse but with the market not fully believing Trump’s threats. Currently, S&P futures are down -0.46% (the S&P 500 ended down -0.10% vs. the European closing bell). Asian markets are climbing (China’s CSI 300 +0.25% and Japan’s Nikkei +0.10%).
Today there are no relevant macro data releases.