The Ibex (+ 0.2%) closes far from highs after a further delay in rate hikes
The banking sector has been the main burden for the Spanish selective
The Ibex started the session with strong gains, but closed with slight increases of 0.2% to 9,169.20 points, after the European Central Bank (ECB) delayed, for the second time this year, its guidance on interests. The organism has announced that there will be no movements in the rates, at least, until the middle of next year. The banks were positive, but they have turned around after hearing this news. In fact, Sabadell was up 2% but closed with a 5% cut; while BBVA and Santander also rose 2% and fell by 0.7% and 1%, respectively.
IBEX 35
11.435,700
-
-0,28%-31,60
- Max: 11.474,90
- Min: 11.399,10
- Volume: -
- MM 200 : 11.294,32
As expected, the ECB has decided to maintain the benchmark interest rate for its refinancing operations at 0%, while the deposit facility rate will continue at -0.40% and the loan facility rate at 25%.
Regarding the new round of long-term financing operations with a specific objective (TLTRO-III), which will be held quarterly between September 2019 and March 2021, the ECB has decided that the interest rate for each operation will be set at a level 10 basis points above the average rate applied to the main refinancing operations of the Eurosystem.
The ECB's decision comes at a time when central banks have regained their leading role. The market is waiting for this shift to materialize in monetary policies that, in the case of the Federal Reserve (Fed), will translate into a rate cut (at least) this year.
In the case of the ECB, Draghi has tried to convince the market that extending the horizon of the first rate hike in six months is enough, but it seems that the market was expecting more.
The Italian central banker added that "the ECB will lower interest and return to buy assets if adverse contingencies materialize", but his message has not penetrated among investors. The main sources of uncertainty are commercial tensions and increased protectionism and the possibility of a chaotic Brexit in Europe.
STRESS ON TRADE
Meanwhile, the same old problems continue, such as the US trade tensions with China and Mexico. Yesterday, US representatives met with Mexicans to try to avoid the 5% tariffs that the US wants to impose on all goods coming from Mexico as of June 10.
The talks did not reach an agreement, although there seems to be 'good harmony'. US President Donald Trump wrote on Twitter that progress had been made but that "it was not enough". Trump has stressed that if no agreement is reached, tariffs will start on Monday. However, there are Republican senators who have recently indicated that they do not agree with this decision.
ECONOMY, COMPANIES AND OTHER MARKETS
In addition to the ECB, today the agenda has included the GDP of the Euro Zone, which maintained its rate of growth in the first quarter.
At the business level, the news of the day has been that Fiat has withdrawn its offer of merger with Renault. The French group has plummeted more than 6% and the Italian manufacturer has fallen slightly by 0.3%.
In other markets, Brent oil falls 0.1% to $ 60.58. For its part, the euro increased in value 0.64% to $ 1,1292. In addition, the Spanish risk premium has dropped to 82 points and the yield on the Spanish 10-year bond is relaxed to 0.61%, to a new historical low.
