EUR 100.00 For Business Accounts Only

IBERIAN DAILY 29 NOVEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: SACYR, SIEMENS GAMESA, TOURISM SECTOR.

MARKETS YESTERDAY AND TODAY

South African Covid variant hits the market
Heavy profit taking on Friday in European markets, where the fear of the new Omicron Covid variant has led to borders being closed to trips to southern Africa. Thus, Spain joins a long list of European countries (UK, France, Italy, Switzerland, etc.) that will suspend flights to South Africa and Botswana, with more sever restrictions being considered, such as 10-day quarantines for travellers from countries with known cases. Over the weekend WHO stated that it is still unclear whether the variant causes more severe symptoms, which stabilised losses in Asia. With all this in mind, Friday’s losses deepened those seen over the week, ending with around -5% for the Euro STOXX and core Europe, and slightly less in the IBEX and only -2.2% in the US. In the Euro STOXX, the best-performing sectors on the week were Household Goods and Telecoms, whereas the biggest drops came in sectors vulnerable to Covid-19 like Travel & Leisure, followed by Autos and Technology. On the macro side, in the euro zone October’s M3 rose unexpectedly. From the ECB, Luis de Guindos stated that the PEPP is designed to end in March’22, although the organisation will be cautious regarding the pandemic, and monetary conditions will continue to be accommodative. In China, October’s industrial profits rose more than expected, while the organisation warned that a zero-tolerance policy will be necessary to fight against the Covid-19 variants. Lastly, OPEC+ will postpone this week’s meeting in order to assess the impact from the new variant on global demand.
What we expect for today
We foresee some rally at the opening bell and a calmer session in European stock markets awaiting a better assessment of damages from the Omicron variant on the market by investors. Currently, S&P futures are up +0.9% (the S&P 500 fell -2.20% on Friday). Volatility in the US rose (VIX 28.6%). Asian markets are falling (China’s CSI 300 -0.5% and Japan’s Nikkei -1.6%).
Today in Spain and Germany we will learn November’s preliminary inflation, in the euro zone November’s economic climate index, in Mexico October’s unemployment rate and in the US October’s pending home sales. In debt auctions: Germany (€ 6 Bn in 6M and 12M t-bills) and France (€ 5.4 Bn in 3M, 6M and 12M t-bills).