EUR 100.00 For Business Accounts Only

IBERIAN DAILY 06 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: OHLA, TELEFÓNICA.

The market remains confident in the cycle
The resistance shown by the latest leading indicators fuelled European stock markets despite the warnings from Central banks. With this in mind, the best performers in the Euro STOXX were cyclicals such as Basic Resources and Automobiles last week whereas Pharma and Real Estate (given the increase in financing costs) saw the biggest drops. On the macro side, in the euro zone, February’s services PMI dropped unexpectedly although in Spain it exceeded 56.7 vs. 52.7 in January. Meanwhile, January’s production prices dropped more than expected. In the US, February’s non-manufacturing ISM dropped less than expected whereas the price sub-index moderated significantly. From the Fed, R. Bostic suggested that rate rises could be halted after the summer. Fed Funds futures price in rates at 5.5% maximum through Sep’23. In China, the government announced its 2023 growth target of around 5.0%, with the highest increase in defence spending (7.2%) in the past 4 years.
What we expect for today
The European stock markets would open with gains of around +0.3%, but with Basic Resources penalised by the drop in metal prices following the disappointing Chinese growth target for 2023. Currently, S&P futures are up +0.15% (the S&P 500 ended +0.54% higher vs. the European closing bell). Volatility in the US decreased (VIX 18.49). Asian markets are mixed (China’s CSI 300 -0.4% and Japan’s Nikkei +1.13%).
Today we will learn in the Euro zone March’s SENTIX confidence index and January’s retail sales, in Mexico December’s fixed investment, and in the US January’s final durable goods orders. In debt auctions: Germany (€ 5 Bn) and France (€ 5.4 Bn) will issue 3M, 9M & 12M T-bills).