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Capricorn 35, live | Stock markets seek to regain ground after banking meltdown | Financial markets

What does Ibex 35 do?

Euro Stoxx 50 futures are expected to rise by about half a percentage point. The Ibex 35 index fell 0.97% to 11,300 points, weighed down by a slump in the banking sector that led the decline ahead of the ECB meeting and the Mexican presidential election.

What are the rest of the stock markets doing?

Mixed dynamics today in the main Asian indices. The Nikkei fell 1%, Hong Kong’s Hang Seng added 0.2% and the Shanghai Composite fell 0.3%.

Wall Street closed higher last night, with the Dow Jones up 0.36% on the session with minor fluctuations. The S&P 500 added 0.15% and the tech-heavy Nasdaq added 0.17%. JOLTS survey data published yesterday confirms the likelihood of a Fed rate cut in September.

Keys of the day

At the ECB meeting tomorrow, Thursday, the market is discounting a 25 basis point cut in the official rate to 4.25%, although there is great uncertainty about the next steps taken by the supervisor as this will depend on the inflation situation in the eurozone.
In the US, investors are now awaiting May employment data due on Friday, expecting a slowdown enough for the Federal Reserve to cut interest rates soon, but not too sharply to fear a recession. According to the FedWatch CME tool, traders now estimate the likelihood of a rate cut this year to be nearly 62%, down from 36 a week ago.
In Europe, the final readings of the PMI and services sector composite economic indicators for the eurozone and the UK are known.
In the US, weekly mortgage applications arrive as usual on Wednesday, although the key highlight of the day is the ADP private employment survey.
Inditex publishes reports for the first quarter of the year. Consensus forecasts sales growth will miss double digits for the first time since 2019.
BBVA has already submitted all permit requests required for the Sabadell takeover bid, including from BCE, CNMV and CNMC, and expects the process to obtain them to take six to eight months.

What do analysts say?

Loomis Sales, fund manager of the Natixis IM group, comments: “The long cycle of ECB cuts is not a fact. Europe faces some persistent uncertainties that could prevent inflation from running smoothly and official interest rates returning to neutral. These include a possible improvement in the economy, high unit labor costs, geopolitical uncertainty and fiscal policy. Growing uncertainty and aggressive rate cuts could raise fears of a policy misstep, threatening the central bank’s credibility. “In our view, ECB uncertainty makes it difficult to predict a strong widening of the interest rate differential between Europe and the US.”

Frank Dixmier, Global CIO Fixed Income at Allianz Global Investors: “Based on the downward inflation trend in the eurozone, the ECB is expected to confirm a 25 basis point rate cut at its meeting this Thursday. President Christine Lagarde and the most conservative members of the ECB have strongly suggested that the cut will happen, so markets are already looking forward to it. Investors’ attention will be focused on what comes next. After a long period of flat rates, the start of a cut cycle raises several questions about next steps: What is the ECB’s final rate target? How quickly will the central bank catch up? Investors will be very alert to any hints about the answers to these questions, as well as to reports of new macroeconomic forecasts. While there is consensus on this first rate cut, the pace of future cuts is the subject of intense debate among members.”

What is the evolution of debt, currency and commodities?

The euro is at $1.0882.

Brent crude, Europe’s benchmark, is at $77.72 after several periods of declines caused by the latest decision by the Organization of the Petroleum Exporting Countries and its allies (OPEC+), which announced on Sunday an extension of production cuts. but also that it will phase out voluntary cuts over a twelve-month period, starting in October.

The interest rate on 10-year Spanish bonds is 3.280%.

Quotes

STOCK EXCHANGE – CURRENCIES – DEBT – INTEREST RATES – RAW MATERIALS

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