EUR 100.00 For Business Accounts Only

IBERIAN DAILY 06 APRIL (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ELECTRICITY SECTOR, OHLA.

The Ibex was not part of the bearish pattern
Even though the Bank of Spain postponed the recovery and cut its GDP’22 growth forecasts for the Spanish economy to 4.5% (from 5.4% previously), the Ibex (+1.2%) was the only main index in the euro zone that ended in positive territory. The new sanctions to Russia (Russian coal imports could be banned, the access to trucks and ships could be blocked, as well as machinery exports) and the hawkish message from the Fed members weighed on most stock markets where value outperformed growth on both sides of the Atlantic. Thus, in the Euro STOXX, Utilities and Telecoms led gains vs. the worse performance of Construction and Industrials, with the French CAC index posting the biggest losses (-1.3%) due to polls pointing to Le Pen gaining ground to Macron. On the macro side, in the euro zone, March’s final services PMI was raised due mainly to Germany. In the US, March’s services ISM climbed less than expected. On another note, L. Brainard from the Fed warned he expects a rapid reduction of the balance sheet in 2022 whereas George admitted that rates should be raised above the neutral level to contain inflation, which dragged down sovereign debt. In China, March’s Caixin services PMI dropped significantly more than expected to 42.0 from 50.2.
What we expect for today
The European stock markets would open with slight drops, spurred by the rise in interest rates, that could be reversed over the session, although the CAC could continue to be influenced by the polls in the run-up to the elections, which are bringing the possibility of a Le Pen victory closer (yesterday there were sharp drops in banks, infrastructure and the market in general). Currently, S&P futures are flat (yesterday the S&P 500 ended -0.52% lower vs. the European closing bell). Volatility in the US rose (VIX 21.03). Asian markets are sliding (China’s CSI 300 -0.4%, and Japan’s Nikkei -1.5%).
Today in the US we will learn the Fed minutes and in Germany February’s factory orders. In debt auctions: Greece (€ 625 M in 3M T-bills).