EUR 100.00 For Business Accounts Only

IBERIAN DAILY 06 JUNE (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: REPSOL, SACYR.

Week marked by OPEC+ and Fed’s Beige Book
It was a week of volatility on the European stock markets, whose performance was marked by the relatively strong macro data in the US despite the fact that the Fed’s Beige Book showed the economy growing at a modest pace. The OPEC+ meeting, announcing a production increase did not end up spurring stock markets either in view of the risks arising from lower production in Russia. Thus, the Ibex 35 ended up being the week’s worst relative performer, contracting by more than -2% to levels below 8,8000 points, whereas the Dax ended virtually flat and the Euro STOXX 50 fell by around -1%. Within the Euro STOXX, the best-performing sectors were Household Goods and Consumer Goods, whereas Travel & Leisure (with drops of around -4%) and Utilities were the worst relative performers. On the macro side, in the US, non-farm job creation beat expectations (a high of a still dynamic labour market), although wage returns slowed, as expected, whereas May’s ISM non-manufacturing index fell more than expected. Separately, the Secretary of Commerce again insisted on the possibility of reducing tariffs on certain Chinese products, although there is no consensus within the Biden Administration. In China, the Caixin Services PMI recovered less than expected in May. Separately, further easing of restrictions in Beijing was announced as from Monday (public transport resumes, offices and restaurants will be reopened etc.), although the risk now lies in the Hong Kong cases.
What we expect for today
European stock markets would open with gains of around +0.5%, with strong performance from tech and luxury stocks (relaxation of restrictions in China) in a week looking to the ECB meeting and US inflation data. Currently, S&P futures are up +0.5% (the S&P 500 ended unchanged vs. the European closing bell). Volatility in the US fell (VIX 24.79). Asian markets are climbing (China’s CSI 300 +1.4% and Japan’s Nikkei +0.3%).
Today in Mexico we will learn May’s fixed investment.