The Ibex and the rest of the European stock markets will try this Wednesday to regain calm after two very difficult days – especially yesterday, Tuesday –, marked by sharp falls due to the crisis in Iran. Oil has become the great focus of attention. Today crude oil continues to correct, with Brent touching $83 and West Texas at $75.84. The Euro Stoxx futures are now down 0.12% after the strong punishment experienced yesterday on this side of the Atlantic, with falls of more than 3% in all indices and even greater in the Ibex (-4.55%). This greater weakness of the Spanish selective could continue today, as Spain has become the focus of harsh criticism from Donald Trump for the Government’s position regarding Iran. Spain has refused to support the United States and this position has caused the discomfort of the American president, who has threatened to «cut all commercial relations» with our country and has gone so far as to affirm that Spain «is a terrible ally.» The President of the Government, Pedro Sánchez, makes an institutional statement on the matter at 9:00 a.m. This is one of the issues of the day, as Spain becomes the focus of international attention and becomes a potential target of retaliation by the United States, which adds a new factor of uncertainty to the markets. All this, moreover, in the midst of growing geopolitical tension on the fifth day of war in Iran. In fact, this context has caused sharp falls in the Asian stock markets during the early hours. The Kospi, which plummeted 7% yesterday, has fallen as much as 12%, while the Nikkei loses around 4%. “The decline in the Kospi can largely be attributed to the concentration on a few stocks that we see in Korean markets,” said Lorraine Tan, head of Asia equity research at Morningstar. Wall Street closed the last session with falls, although much more contained than those recorded in Europe. The rise in crude oil prices penalizes the Old Continent more than the United States, which is a producer and exporter of oil. All in all, the situation remains potentially dangerous for both due to the risk of a spike in inflation and an economic slowdown. The Dow Jones, the S&P 500 and the Nasdaq ended Tuesday with declines close to 1%, while today US futures lost between 0.4% and 0.9%.
THE AGENDA OF THE DAY
In addition to the geopolitical tension, investors will be awaiting other relevant events on the calendar today, such as the services and composite PMIs for February in Europe and the United States, where the non-manufacturing ISM for the same month will also be published. In Japan, the February services PMI improved to 53.8 from 53.7, in line with expectations. In China, the official manufacturing Purchasing Managers’ Index (PMI) fell to 49 in February, according to the National Bureau of Statistics, below economists’ forecast of 49.1. The non-manufacturing PMI improves to 49.5 from 49.4, although it is also below expectations. Investors in the region will also be watching an annual parliamentary meeting of China’s policymakers that begins later in the day. The meeting, known as ‘Two Sessions’, includes a consultative conference that will start later today and the National People’s Assembly, which is scheduled to open on Thursday. Chinese Premier Li Qiang will announce a series of economic goals at the Assembly, which were largely already decided at a meeting in December. Today the eurozone strike for January, the ADP employment report for February and the Fed’s Beige Book will also be announced. In addition, we will have to pay attention to the publication of relevant business results in Europe.
OTHER MARKETS
The euro is exchanged at 1.1604 dollars (-0.07%). Oil rises more than 2% (Brent barrel: +2.58%, $83.51; WTI barrel: +2.29%, $76.27). Gold advances 0.69% ($5,158) and silver, 0.99% ($84.93). The yield on the 10-year American bond rises to 4.073%. Bitcoin is trading at $68,135 and Ethereum is trading at $1,966.
