Santander | And Moody’s HY default rate rises to 2.9%, in line with the progressive deterioration of the credit quality of companies globally. Moody’s published its monthly report last Friday in which it states that there were 15 defaults in March, its highest monthly number since December 2020 and which places the balance of 1Q23 at 33 defaults (its highest quarterly volume since 4Q20, of which 24 correspond to US…
Banca March : Mixed US consumer spending data. The most negative note was the drop in retail sales in March which points to a slowdown in private consumption. Specifically, retail sales fell -1% month-on-month after dropping -0.2% in the previous month, a figure that is worse than expected and confirms a deterioration in consumption in the first months of the year. On the more encouraging side, the University of Michigan’s…
Julio López (Attitude Gestión SGIIC) | Never has a recession been more unanimously expected. Interest rate hikes and lower government spending should have slowed economic growth, yet we don’t see it today. But the question is, has there really been such a reversal in monetary and fiscal policies? It is true that the FED has tried to reduce its balance sheet, but the small crisis in the American banking sector…
Bankinter | Fed members unanimously decide to raise rates by +25bp, the same rate hike they did in February and which compares to the +50bp hike in December. The minutes reiterate the message of the previous meeting that inflation remains elevated and that its deceleration is slower than expected. Strong labour market and GDP growth support price increases. All members approve of raising rates by +25bp and continuing to reduce…
Link Securities | According to data from the General Bureau of Customs, China’s trade surplus rose to $88.19 billion in March from $44.35 billion in the same month a year earlier, far exceeding the analysts’ consensus forecast of a $39.2 billion surplus. Exports unexpectedly rebounded by 14.8% year-on-year, following a 6.8% drop in the combined January-February period, and against the consensus forecast of a 7% decline. The reading represents the…
Santander | It is one of the first headlines from last night’s FOMC minutes. Fed staff members go from assigning a near 50% probability, to now forecasting a mild recession. With the Fed also nearing the end of the cycle, it is no surprise that some dissenting voices are beginning to appear, opening the door to new bouts of volatility that have not favoured the credit market (MOVE/Main correlation of…
Renta 4 : European stock markets open almost flat (Eurostoxx futures -0.2%, S&P futures 0%), on a day in which the main reference will be the US March inflation data (2:30pm). The market expects further moderation in headline CPI (5.1%e vs 6% year-on-year), but a rebound in core CPI (5.6%e vs 5.5% previously) after five consecutive months of decline from a peak of 6.6%. We will see its impact on…
Alicia García Herrero (Natixis) | Brazilian President Luiz Inácio Lula da Silva is currently in Beijing with a huge official and business delegation. His goals are clear: first and foremost, bringing growth opportunities to Brazil, whose economy has been battered by the Covid pandemic. Brazilian exports of commodities into China have ballooned since Beijing’s fiscal binge in 2008 that led to pent-up demand for commodities. More recently, Brazil’s large lithium reserves,…
Bankinter | CPI falls back in March to +0.7% year-on-year from +1.0% and Industrial Prices remain negative at -2.5% year-on-year. This is the lowest CPI reading since September 2021 and Industrial Prices (IPP) since June 2020. The CPI Underlying Rate stands at +0.7% year-on-year from +0.6% previously. Analysis: Consumer and producer price inflation remains at exceptionally low levels in China. CPI has remained below the government’s target of +3% for…
Morgan Stanley | The probability of recession especially in the US has increased for most investors in recent weeks. Indeed, our analyst Ellen Zentner has revised her growth estimates downwards (on a 4Q/4Q basis): -10bps for 2023 (to 0.3%) and -20bps in 2024 (to 1%). Even in the case of avoiding technical recession, the impact on the labour market would be unavoidable: the macro team expects new jobs to be…