The Ibex and the rest of the European stock markets have rebounded this Tuesday, although most have registered increases of close to 2%, while the Ibex has been disinflated and closed with an advance of 1.1 %%. The Spanish selective has been supported to rise in the significant increases in Repsol (+ 13.20%) and Endesa (3.5%) (after publishing results). Outside our country, the accounts of BNP Paribas (reduces the benefit by the impact of the Covid-19 by 33%).
One of the main news of the day is that the European Central Bank (ECB) has called an emergency meeting this afternoon to assess the decision of the German Constitutional Court, which has given its verdict on the program of purchase of public debt launched by the ECB in 2015 (PSPP for its acronym in English).
In his verdict, the German Constitutional Court has partially rejected the claim presented almost half a decade ago by a group of German academics and businessmen against the public debt purchase program, although considers that the entity has exceeded its powers and that said program has a disproportionate scope. The Court has required the issuing institute of the eurozone to introduce “within a maximum period of three months” the necessary changes to justify the proportionality of the objectives of your program.
Despite the fact that in its judgment the Karlsruhe Court expressly left out “the financial assistance measures adopted by the EU and the ECB in the context of the coronavirus crisis”, such as the PEPP program, the conditions required of the ECB for the participation of the Bundesbank They can be seen as a limitation of the central bank’s firepower to address the Covid-19 crisis.
As for the macro data of the day, Spain’s unemployment rises in April by 282,891 people, its biggest rise in this month in history. Today the ISM non-manufacturing is also published on the other side of the Atlantic. We recall that tomorrow the PMI services in Europe will be known and that they are expected to be “catastrophic”.
The bounce on the oil price last session contributed to the recovery on Wall Street, according to experts, and that rebound continues on Tuesday. The Brent barrel is trading at $ 28.31 and the West Texas at $ 21.65.
“The rebound in the price of crude oil was largely driven due to expectations of a rebound in demand as governments continue to prepare for the gradual easing of blockades. Italy and Spain have relaxed some restrictions, while the UK government has outlined its latest guidelines of what is required for a limited resumption of the economy, “explains Michael Hewson, chief analyst at CMC Markets in London.
In the chapter on tensions between China and the United States over the Donald Trump Administration’s accusations of the Asian giant, which it points to as the cause of the virus, China has answered that these accusations are a “strategy” to cover up Trump’s “incompetence”. Be that as it may, the market is much calmer when both countries are in tune. Such a direct confrontation foresees the worst when, in a future that now seems far away, both resume that now forgotten trade war and their plans to iron out rough edges.
Otherwise, the Reserve Bank of Australia (RBA) it has kept rates unchanged at 0.25%. The agency has seen some better in financial markets in the past month, with credit markets open to more companies and bond yields returning to very low levels.
“Tomorrow will be a month ago from the bullish session in which the Ibex left us a gap (support) at 6,580 points. The famous gap that we have referred to so many times in recent weeks and that for the moment it has acted as a support“explains José María Rodríguez, technical analyst at Bolsamania.
“‘Gap’ that was populated but not closed yet. Only that now we have a new resistance in the bearish gap this Monday at 6,923 points. And above that we have the April highs, the rebound highs at 7,210 points. In short, there are more and more resistances that we have above and more approaches to support levels, “he explains.
“This doesn’t exactly make me feel good. That said and as we keep remembering over and over again the most immediate support has not yet been drilled, the bullish gap to which we have previously referred. As long as it does not close we can say that in the worst case the trading bias is lateral. Within a corrective phase of a greater degree is clear, “concludes the expert.