Monday, May 29, 2023

Ibex-35 falls on uncertainty about US debt ceiling

May 24 – The main Spanish stock index Ibex-35 opened lower on Wednesday, sharing concerns of other financial markets reaching an agreement to raise the US debt limit is eroding investors’ risk appetite.

Discussions between the White House and congressional Republicans over the US debt ceiling show no signs of progress and continue to capture market attention, amid warnings that failure to reach an agreement could lead to default and push the country into recession. Pushing can help.

Treasury Secretary Janet Yellen has warned that the administration will not have enough money to make the payments by June 1.

On the other hand, aggressive rhetoric from the US Federal Reserve’s monetary leaders has fueled market bets that interest rates will remain high for an extended period of time, and the Fedwatch tool pegs the odds of another hike at 27%. june.

Regarding rates, the minutes of the Fed meeting in May will be published during the day, which may give more macroeconomic signals.

“The minute may serve to confirm that the market is highly ‘dowish’ (forecasts of monetary easing) for a discount cut for this year (-50 bp by the end of 2023 and -25 bp by early 2024) Keeping in mind that inflation is still far from the 2% target,” wrote Renta4 analysts.

In terms of rates, the Central Bank of New Zealand surprised markets by announcing that it had ended its macroeconomic tightening cycle after raising its interest rates to 5.5% and indicating that it would keep them until mid-2024. Is done.

IFO data for Germany will also be released during the day and inflation data for the US will be reviewed on Thursday.

Thus, at 07:01 GMT on Wednesday, the select Spanish stock market Ibex-35 fell 89.80 points, or 0.92%, to 9,181.50, while the FTSE EuroFirst 300 index of broad European shares fell 0.69%.

At the head of the board was energy company Greenergy Renewables SA, which rose 1.13% after announcing a 15% increase in its profits for the first quarter.

In the banking sector, Santander declined by 1.49%, BBVA by 1.76%, Caixabank by 0.77%, Sabadell by 0.97%, Bankinter by 0.54% and Unicaja Banco by 1.10%.

In broad non-financials, Telefonica fell 0.03%, Inditex fell 1.00%, Iberdrola fell 0.73%, Selnex fell 0.65% and oil company Repsol rose 0.04%.

Nation World News Desk
Nation World News Desk
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