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IBERIAN DAILY 01 JULY (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: REPSOL.

Caution ahead of French election
It was a volatile week on European stock markets, where the political uncertainty in France continued to weight after a first round of legislative elections that leave LePen’s party as the winner with 33.2% of the votes. Thus, the French CAC fell -1.65% on the week, compared to the DAX’s gains (+0.80%). By sectors, in the STOXX 600 Banks and Energy had the biggest gains, with Retail and Household Goods falling the most. On the macro side, in Spain June’s general inflation fell less than expected (3.5% YoY), with the core figure remaining at 3.0%. In Germany, June’s number of unemployed was higher than expected, leaving the unemployment rate at 6.0%. In France, Macron and the New Popular Front will give up its place in the election so that in the second round of voting the candidate for the party receiving the most votes will run against the far right. In the US, although personal income rose more than expected, outlays were weaker than expected, with the core consumption deflator for May was in line with expectations, hitting a low since 2021, which opens the door to future rate cuts. The Chicago PMI and U. Michigan consumer confidence for June rose more than expected (inflation forecasts fell to 3.0%). In China, the manufacturing PMI remained at 49.5 in June, whereas the services index fell to 50.5 from 51.1. In Japan, the 2Q’24 Tankan index recovered slightly more than expected.
What we expect for today
Stock markets would open with gains of +1.0%, with the recovery of the financial sector. Currently, S&P futures are up +0.25% (the S&P 500 ended down -0.69% vs. the European closing bell). Asian stock markets are falling (China’s CSI 300 -0.10%, Japan’s Nikkei -0.07%).
Today in Spain, Germany and the euro zone we will learn June’s final PMI, in Germany June’s inflation, in Brazil June’s manufacturing PMI, May’s construction spending and June’s manufacturing ISM and in the euro zone the Central Bank forum in Sintra will kick off.