The Ibex-35 stops its bullish streak on fears about inflation and Brazil

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Spain’s stock index Ibex-35 opened on Monday with doubts, with some profit collection after 5 consecutive sessions on the rise, at a time when macroeconomic data have revealed the difference in progress against inflation between the US and the euro area.

On Friday, the combination of strong U.S. job growth and slower wage growth with a sharp drop in service sector activity opened up the possibility that the Federal Reserve will be more dovish in its fight against inflation.

By contrast, the euro area inflation data also published that day were still well above the ECB’s target.

“Although the latest data show some moderation in inflation, it continues at very high levels and the ceiling to it has yet to be confirmed, especially in core inflation in Europe,” said the analysts of Renta 4 in your daily note to customers.

“In this sense, we believe that such high inflation will cause rates to continue rising, not seeing reductions in them in 2023, to which is added the materialization of the expected deterioration of the economic cycle and its impact yet to be seen on business results,” they added.

On Monday, markets received positive news coming from China with new measures to de-escalate COVID-19 restrictions, and watched with concern the anti-democratic riots that occurred on Sunday in the Brazilian capital. Among the Spanish companies with the most weight in the country are Santander, Telefónica, Mapfre and ACS.

This week the focus will be particularly on Fed Chairman Jerome Powell’s speech on Tuesday and US consumer price data on Thursday.

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On Monday, the key macroeconomic data for the euro area are the Sentix index for January and the unemployment rate for November.

At 08:05 GMT on Monday, Spain’s selective Ibex-35 was down 17.10 points, or 0.20%, at 8,684.00 points, while the FTSE index of large European stocks Eurofirst 300 advanced 0.32%.

In the banking sector, Santander lost 0.46%, BBVA was down 0.40%, Caixabank advanced 0.44%, Sabadell gained 0.77%, and Bankinter was revalued by 0.35%.

Among the large non-financial stocks, Telefónica fell 0.68%, Inditex yielded 0.11%, Iberdrola was down 0.78%, Cellnex fell 0.31% and the oil company Repsol lost 2.17%.

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