bce sede nueva

Latest ECB Minutes show significant support for +50 b.p. hike to 2.5% (deposit rate)

Yields 4: European markets open higher (Eurostoxx futures +0.5%, S&P futures -0.1%) after a session of less to more on Wall Street, and on a day in which the most relevant will be the ISM services report in the US, which could fall in February (54.5e and 55.2 previously), and where the main focus will be on its price component, with upside risk after the strong rebound seen in the…

inflationCM copia

Consumers’ one-year inflation expectations to rebound (+4.2% vs. +3.9%) for first time in 10 months

Renta 4 : European opening with slight gains (Eurostoxx futures +0.4%, S&P futures -0.1%), on a day of numerous 4Q22 results in Spain. In the background, and on the day that marks one year of war in Ukraine, a peace proposal presented by China that does not seem to have the support of the US and the EU. Today’s macro focus will be on the US core private consumption deflator…

fata morgana

The Fata Morgana, or how markets ignore that the greatest risk for 2023 lies in overestimating economic growth

Banca March | Sometimes, when the sun’s rays hit the sea water and there is a big difference in temperature, an optical illusion takes place which creates visual effects that can lead us to think that a boat is capable of “flying” several metres above the horizon. This effect, a mirage, is called Fata Morgana. Is this effusive start to 2023, in which global stock markets are up more than…

stockmarkets 1

2022, A Favourable Year For The Markets; Average Upside Of Between +14%/+17%

Bankinter |Corporate results will be one of the major catalysts, but also the reduced impact of Covid-19, with new medicines to fight it. Inflation will moderate im the second half of the year and central banks will slowly normalise their monetary policies, which is reasonable against a backdrop of economic expansion. Whatsmore, financial conditions will be accomodative and liquidity will be high. We envisage an average upside potential for the…

Teresa Ribera

Empathy-Driven Markets

J.P. Marín Arrese | Ms Ribera, the Spanish Minister in charge of energy and environment, has warned electricity companies that lack of empathy towards their clients may undermine their stock performance as markets price-in such conduct. It wasn’t just a personal comment. She delivered it in the Parliamentary debate over the upsurge in the price of electricity providing no clue on how empathy-driven markets might work. Yet, one has the…

hedge funds

A Moment In Markets – The Big Movers Coming Up

Positive economic data from China last week gave markets the confidence that there is a way out of the ongoing slump for the global economy. But are the US and Europe going to paint an equally encouraging picture? The US will disclose its third quarter gross domestic product (GDP) growth numbers on Thursday 29 October while Eurozone’s figures will be released the following day. Quarter-on-quarter GDP change in Q3 is forecasted to be 29.9% for the US (after a decline of 31.4% in Q2) and 9.3% for Eurozone (after a fall of 11.8% in Q2). Risk assets will draw comfort from knowing that an economic recovery is underway globally.

stoxx600 portada

Uncertainty Pushes Rates To Unknown Limits

Financial markets remain volatile with the concerns about the virus spillover effect being the main market driver. After yesterday’s equity rebound, declines in the equity markets have resumed today, with market risk measures such as VIX soaring to 37, although moderated afterwards but remains above 30.

1008p2 Wall Street sign Main i

Stock Markets Remain Vulnerable To Short-Term Correction

The People’s Bank of China pumps 1.2tn yuan into the financial system to protect the economy from the coronavirus Global stocks extended their rally last week despite concerns that the coronavirus will slow global growth. Experts at Julius Baer continue to argue that stocks are susceptible to a short-term correction and consider any weakness as an entry opportunity for long-term investors.


Gold: Tossed And Torn By The Virus

As investors are still struggling to properly price the impact of the coronavirus, volatility in financial markets remains elevated. Risk-on sentiment returned to the markets yesterday, putting pressure on gold. Barring a longer-lasting impact on Chinese growth, we do not expect much more fundamental short-term support from the virus for gold. However, on a longer-term horizon we still see upside and maintain a Constructive view.