Thursday, December 9

Spanish inflation will add spice to the ECB meeting

The publication of the Spanish inflation figure for October will put pressure on the ECB and will raise the tone of the hawks in the debate that is expected at the Governing Council meeting.

Today the meeting of the central bank coincides with the preliminary data on the evolution of prices in Spain during October.

If the forecasts of the consensus of analysts are fulfilled, the spicy is ensuring in this meeting.

Experts anticipate a monthly rise of 1.2 percent, from 0.8 percent in September, while the annual rate may skyrocket to 4.5 percent.

And tomorrow the CPI of the euro zone will be known. The 3.4 percent is expected to stand at 3.7 percent in October and close the year at 4 percent.

Investors await explanation from Lagarde

With these numbers on the table, investors will expect Christine Lagarde that says something more than your typical phrase “inflation is transitory.”

The president of the ECB cannot ignore one more meeting the pressure that prices are exerting on the economic recovery.

Even if you announce that, for the time being, you see no reason to change monetary policy, you would have to acknowledge that the rise in prices will last much longer than expected and anticipate at what level they expect prices to stabilize.

When Lagarde appears at a press conference, the German inflation data will have already come out, which will move at levels similar to that of Spain. Do not forget that Bundesbank President Jens Weidmann resigned last week amid warnings about inflation risks.

Expectations of rate hikes

Likewise, and to set the roadmap for investors, Lagarde should comment on expectations of interest rate hikes, which have skyrocketed in the market.

According to different surveys, economists expect a rate hike in Europe in 2022, much earlier than expected by the ECB, which was considering 2023 and even 2024 as options for that rise.

In Spain, today, the economic front is completed with the publication of the Labor Force Survey of the third quarter.

The unemployment rate is expected to decline to 14.20 percent from 15.26 percent in the second quarter.

Outside our borders, pay attention to Third quarter United States GDP and the euro area consumer confidence data for October.

Attention to results

At the same time, investors will have to pay close attention to business performance as well.

Today the day is very intense on the IBEX 35, with the accounts of Repsol, Red Eléctrica, Banco Sabadell, Cellnex, ACS, Naturgy, Viscofan, Fluidra and Ferrovial, among others.

In Europe, pay attention to Total, Royal Dutch, Volkwagen, Unicredit y Merck. And in the United States to Apple, Amazon, Caterpillar y Mastercard.