Peter Goves (MFS) | This was as guided at the last meeting and is largely due to inflation projections being “too high for too long”. On QT, the policy was extended (again, as widely telegraphed) across all APP from July 2023. EGB spreads remain relatively tight and continue to exhibit relatively low volatility. There were minor changes to the forecasts which show medium term inflation at 2.2% (in 2025, +0.1ppt)….
Jeremy Cunningham, Investment Director, Fixed Income at Capital Group| The European Central Bank (ECB) will face an even more challenging policy environment in 2023. Core inflation appears to have already peaked in the major European economies and should continue to fall as the effects of last year’s sharp increases in energy prices fade. However, underlying inflationary pressures are rising. Higher energy prices are being passed through to a wide range…
Intermoney: Transalpine industrial production left a bad taste in the mouth in April, falling -1.9% month-on-month and -7.2% year-on-year. The secondary sector accounts for 16.2% of Italy’s GDP, so it is bad news that there was a generalised contraction in practically all the items, with a particular focus on the -2.1% m. in manufacturing activity. Moreover, the fall was especially visible in the production of base metals and materials, when…
Banco Sabadell: According to information in the press, the EC in a report sent to the Council and the European Parliament is calling for the withdrawal of emergency interventions in the wholesale market, such as the cap on income in the electricity market (€180/MWh in Europe and €67/MWh in Spain) for infra-marginal technologies (renewable, hydro and nuclear). The EC considers that electricity price peaks are not expected next winter like…
Santander Corporate & Investment : Rising interest rates continue to take their toll on bank lending in the eurozone, as shown by the ECB’s data on lending to the private sector in the eurozone published last week. It confirms the progressive slowdown in bank lending to +3.5% year-on-year in April vs. +4% in March and a peak of +6.5% in September last year, thus approaching its pre-pandemic levels of +3%…
Banco Sabadell: From the declarations in Bloomberg of IAG’s CEO, Luis Gallego, we highlight: They expect a better summer, although there are still difficulties such as air traffic control in France. In any case, they see very strong demand in Q2 and Q3, with less visibility for Q4. Premium traffic is offsetting the weakness of corporate traffic, which remains at 70% of 2019 levels. On consolidation opportunities, apart from the…
Banc Sabadell | According to Reuters, Airbus (AIR) is reportedly the favourite (over Boeing) to win IndiGo’s 500 A320 aircraft order, making it the industry’s largest order by volume (versus one for 470 aircraft placed by Air India a few months ago). On the other hand, both Airbus and Boeing are reportedly also competing to sell 25 aircraft (AIR’s A330neo or Boeing’s 787) to the same airline. No statement has…
Renta 4| Park Air is a leader in ground-to-air radio systems for civil and military air traffic management. Its customers include air navigation service providers, airports, systems integrators and government military organisations. Park Air has annual sales of around €20 million, achieved negative EBIT in 2022, more than 120 employees and a partner and distribution network that enables it to supply systems in more than 100 countries. The acquisition would…
CdM: Price rises ease in the euro area. In May, inflation fell nine tenths of a percentage point from the previous month, bringing the Consumer Price Index (CPI) to 6.1%, according to Eurostat, the EU’s statistical office. This is the lowest level since February 2022, coinciding with the Russian invasion of Ukraine. Excluding the impact of energy, food, alcohol and tobacco, core inflation achieved two consecutive months of moderation, standing…
Banca March| The European Central Bank (ECB) continues to see “vulnerability” in the markets given the new interest rate scenario, which in its opinion poses higher financing costs for companies and households that could trigger a liquidity crisis, given the need for massive asset sales in a hypothetical panic scenario. This vulnerability would be concentrated above all in real estate funds and in the debt market, this being one of…