The Ibex-35 manages to maintain 7,800 points in a session also marked by the avalanche of business results
The time has come. After three consecutive days of notable gains, European stock markets face one of the most significant sessions in this latter part of the year, with the European Central Bank (ECB) meeting and an avalanche of corporate results, including major publicly traded companies such as such as Repsol, Sabadell, Acerinox or Ferrovial.
At the moment, investors are choosing to go on hold and the Ibex-35 is yielding 0.3% without losing sight of the 7,800 points regained on Wednesday. The biggest declines are currently presented by Sabadell -which lost 1.3% despite doubling its profits to September-, Santander (-1.31%), Acerinox (-1.17%), Amadeus (-1.13%). ), Ferrovial (-1.06%) and Grifols (-1.01%), while Repsol led the way with a 2.94% increase, followed by Meliá Hotels (+1.06%), Indra (+0 .65%), Aena (+0.51%), Merlín Properties (+0.48%) and Enagás (+0.42%).
“We do not rule out the possibility that austerity will continue before the ECB meeting, with some investors, especially short-term investors, taking advantage of the strong price increases of many securities in recent days to realize some capital gains,” analysts Link Securities said.
The market consensus has been anticipating a fresh 75 basis point rate hike for days, leaving the benchmark rate at 2%, the highest level since January 2009. A situation that has at least allowed the euro to restore its parity against the dollar this week, after several days with the cross between the two currencies below 1.
Aside from the rate hike and even what Christine Lagarde can add at the post-meeting press conference, the market is paying particular attention to two other important impacts of Thursday’s meeting: first, whether the debate over the reduction of a balance above 8.5 billion euros. And secondly, and possibly more importantly, the agency’s decision on the TLTRO III (long-term financing operations) program. That is, the loan plan devised for the banks with the idea of increasing the liquidity of the system and supporting the transmission of monetary policy.
The central bank is expected to announce changes to the compensation of entities’ excess liquidity, to encourage the industry to prepay loans. And it is that after the rise in interest rates, it is better for the banks to keep that money in the frame of the monetary institution that conducts arbitrage and charges the difference that currently exists with the deposit facility (which sets the interest rate that the credit institutions receive for their overnight deposits with the central bank), generating significant profits ‘from heaven’ for banks at a time of severe crisis for family economies, with many countries in the region at risk of sliding into recession.
Meanwhile, in the commodities market, the Bren-type barrel is trading at $93 with slight declines, while the US West Texas is around $87.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
