The week begins with a renewed dose of tension in the debt market. The oil rally leads to a new spike in debt interest rates. The Ibex nevertheless aims for 8,300 points.
The week begins with a multitude of references in the financial markets. One of the most closely watched in recent times, debt yields, is once again putting investors on their guard. The interest rate on the ten-year US bond is now close to 1.60%, in line with its recent one-year highs. In Europe, negative rates on the German bund are just one step below -0.30%, and in Spain the bond yield is close to +0.40%.
Bonds are under added pressure today as oil prices are under pressure to extend their gains. The price of a barrel of Brent fuels inflationary pressures by surpassing the 70 dollar barrier for the first time since the crisis unleashed by the coronavirus. The new attack on oil facilities in Saudi Arabia raises geopolitical tension in the Middle East at a time when OPEC and allies such as Russia are maintaining their production cuts.
The recovery in demand could accelerate if predictions of a rapid recovery in the economy are confirmed. Faster-than-expected progress in the vaccination phase in countries such as the UK and the US is shortening the recovery timeline. Billion dollar stimulus in the US and encouraging macro export data from China today also point to a revival of the global economy.
The day in Asia saw the Nikkei in Tokyo slow down moderately, by 0.42%, and a severe correction in China, with a 3.47% drop in the CSI 300 index.
The reduced weight of the technology sector is helping Europe to avoid downward pressure, as is the case with the Spanish stock market. The Ibex points upwards to recover part of what was lost last Friday. The advances open the door to the recovery of 8,300 points.
The second best Ibex stock of the year at Friday’s close, Repsol, has a clear path to extend its climb above 11 euros per share in parallel to the rise in the price of crude oil. Other stocks linked to raw materials such as ArcelorMittal and Acerinox are trying to follow the advances.
Oil raises inflationary pressures, and the rise in debt interest rates plays in favour of banks and is once again a drag on sectors such as utilities. Last Friday Sabadell, Santander and BBVA were among the most bullish stocks on the Ibex.
The spotlight is still on renewable energy companies, after their recent falls on the stock market. Solaria and Siemens Gamesa are at least trying to halt the corrections of 7% and 4.8% with which they ended last Friday.
The rest of the European stock markets are trying to avoid the downward pressures coming from Asia and the Nasdaq. The reopening calendars in Europe are an additional stimulus for the recovery of the economy and bring the German Dax closer to the 14,000 point threshold.