Already since last Thursday the index tried to force the breakout zone at highs without success, and it seems that since Friday it is getting back on the bulls due to the favorable news in the Eurozone regarding the continuation of the Euro policy. According to President Von der Legen the ECB will not be able to lower interest rates below 3%, and this will cause inflation to take hold across the Eurozone, which will affect productivity, deficits, demographics, etc. Some analysts even mentioned a kind of return to "Japanization" of the Eurozone as it has rebounded to 3.3%. The ECB refers to 5D Inflation (Debt, Deglobalization, Defense, Decarbonization and Demographic Change) wishing to reduce this to 3d inflation (Decarbonization, Deglobalization and Demographic Change), purely inflationary factors according to Commerzbank AG, which have added public spending on these factors. Basically backdated policies will overwhelm "dovish" or rate easing policies, looking for energy transitions and contemplating a demographic winter based on a high number of people of retirement age with no replacement in the short term, pushing up wages. The pressure on defense and the sovereign debt problem are two relevant data also very complicated to adjust in some countries such as Spain in particular.
Given that the economic data in the euro zone are beginning to show the so-called "green shoots" as Norman Lamont, British finance minister in the nineties, later used in 2009 by Bruce Kasman of JPMorgan Chase and wanted to use unsuccessfully the executive of Jose Luis Rodriguez Zapatero and his vice-president and economy minister Elena Salgado in 2020.
It is clear that it is not the same economic paradigm. Although Spanish consumer confidence has shown a slight improvement in April with respect to the previous figure, and PMI data have not been negative, especially in some sectors related to banking and insurance, which are strong, it is also important to remember that the Spanish industrial economy is closely linked to three countries in terms of production: USA, Germany and UK. If these three economies are doing well: "Spain will improve". Therefore, it would not be surprising if the Fed's push towards the US markets as well as a strong FTSE 1000 and the bullish DAX follow-through could be strongly reflected in the Spanish index.
It is possible that Milei's visit has reflected in the referential in positive on Monday, due to this affinity with the VOX party and this blow to the socialist executive of Pedro Sanchez. But above all what the price has reflected is that Inditex (ITX), Mango (private group), Tendam (Cortefiel group which is 100% private) are 1.62% of the national GDP and represent 60% of the added value generated by the entire fashion sector as a whole (AFI). IBEX companies in general have performed well, with energy and banking companies standing out. In addition to BBVA's attempted takeover bid for Sabadell.
If we look at the chart of the IBEX35 (Ticker AT: ESP35), we can see that since May 9th it has started an upward trend. Forcing an unsuccessful attempt to overcome the 11,384.44 points and this week has started in positive looking for that direction again. There are no bullish signals on the volume bell as it marks a possible return to a price zone near the lows. And the RSI gives no sign of a possible trend although it is slightly oversold at 59.70% which is not surprising in a market with a bullish start to the week. An attempt to test the highs and a return to 11,252 points would not be surprising.
Ion Jauregui - AT Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Given that the economic data in the euro zone are beginning to show the so-called "green shoots" as Norman Lamont, British finance minister in the nineties, later used in 2009 by Bruce Kasman of JPMorgan Chase and wanted to use unsuccessfully the executive of Jose Luis Rodriguez Zapatero and his vice-president and economy minister Elena Salgado in 2020.
It is clear that it is not the same economic paradigm. Although Spanish consumer confidence has shown a slight improvement in April with respect to the previous figure, and PMI data have not been negative, especially in some sectors related to banking and insurance, which are strong, it is also important to remember that the Spanish industrial economy is closely linked to three countries in terms of production: USA, Germany and UK. If these three economies are doing well: "Spain will improve". Therefore, it would not be surprising if the Fed's push towards the US markets as well as a strong FTSE 1000 and the bullish DAX follow-through could be strongly reflected in the Spanish index.
It is possible that Milei's visit has reflected in the referential in positive on Monday, due to this affinity with the VOX party and this blow to the socialist executive of Pedro Sanchez. But above all what the price has reflected is that Inditex (ITX), Mango (private group), Tendam (Cortefiel group which is 100% private) are 1.62% of the national GDP and represent 60% of the added value generated by the entire fashion sector as a whole (AFI). IBEX companies in general have performed well, with energy and banking companies standing out. In addition to BBVA's attempted takeover bid for Sabadell.
If we look at the chart of the IBEX35 (Ticker AT: ESP35), we can see that since May 9th it has started an upward trend. Forcing an unsuccessful attempt to overcome the 11,384.44 points and this week has started in positive looking for that direction again. There are no bullish signals on the volume bell as it marks a possible return to a price zone near the lows. And the RSI gives no sign of a possible trend although it is slightly oversold at 59.70% which is not surprising in a market with a bullish start to the week. An attempt to test the highs and a return to 11,252 points would not be surprising.
Ion Jauregui - AT Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.