Intesa Sanpaolo

Intesa Sanpaolo : Monetary policy meeting on 11 March

Intesa Sanpaolo : European Central Bank: the rise of medium and long term rates on the euro yield curves sparked verbal reactions from the Executive Board…

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Weekly Economic Monitor – 5. March 2021

Intesa Sanpaolo – Research Department


with explicit reference to the activation of the PEPP to correct the unwelcome tightening of financial conditions. However, the movement has been reabsorbed in part. Furthermore, not all the members of the Governing Council agree on opposing the movement.

At its monetary policy meeting on 11 March, the press release and the statements made by President Lagarde could be changed, to signal the possibility of a temporary acceleration of PEPP purchases in the event of rate increases not tied to an improvement of the growth and inflation outlook in the Eurozone. But we do not expect any new formal policy step.

In Italy , final data on net borrowing and debt in 2020 beat expectations, despite rising sharply compared to 2019. Going forward, simulations on the trajectory of debt highlight the need to stimulate potential GDP. On the other hand, the increasingly important role played by the European institutions as debt-holders, reduces risks tied to the volatility of financial markets.

The week’s market movers

In the euro area , data on industrial output in January in the Eurozone, Germany, Italy, and France: we expect a rebound of activity in monthly terms, that could be followed by further output growth in February. The final reading of 4Q Eurozone GDP should confirm the advance estimate at -0.6% q/q. The second reading of consumer price data for February should confirm the stability of year-on-year inflation in Germany (+1,6% y/y).

This week, only a few noteworthy data releases are lined up in the United States , with focus on February inflation. The CPI is forecast higher, with the headline index on the rise by 0.4% m/m, and the core index by 0.2% m/m. The February PPI will be a market mover, in the wake of its surge in January, that should be followed by another solid change, driven by upside pressures stemming from commodities, and supply bottlenecks in many sectors. PPI sub-indices to watch will be the prices of goods, but also of services, after the clear acceleration observed in January in the healthcare sector.


Appendix
Analyst Certification

The financial analysts who prepared this report, and whose names and roles appear on the first page, certify that: (1) The views expressed on companies mentioned herein accurately reflect independent, fair and balanced personal views; (2) No direct or indirect compensation has been or will be received in exchange for any views expressed. Specific disclosures: The analysts who prepared this report do not receive bonuses, salaries, or any other form of compensation that is based upon specific investment banking transactions.

Important Disclosures
This research has been prepared by Intesa Sanpaolo S.p.A. and distributed by Banca IMI S.p.A. Milan, Banca IMI SpA-London Branch (a member of the London Stock Exchange) and Banca IMI Securities Corp (a member of the NYSE and NASD). Intesa Sanpaolo S.p.A. accepts full responsibility for the contents of this report. Please also note that Intesa Sanpaolo S.p.A. reserves the right to issue this document to its own clients. Banca IMI S.p.A. and Intesa Sanpaolo S.p.A. are both part of the Gruppo Intesa Sanpaolo. Intesa Sanpaolo S.p.A. and Banca IMI S.p.A. are both authorised by the Banca d’Italia, are both regulated by the Financial Services Authority in the conduct of designated investment business in the UK and by the SEC for the conduct of US business.
Opinions and estimates in this research are as at the date of this material and are subject to change without notice to the recipient. Information and opinions have been obtained from sources believed to be reliable, but no representation or warranty is made as to their accuracy or correctness. Past performance is not a guarantee of future results. The investments and strategies discussed in this research may not be suitable for all investors. If you are in any doubt you should consult your investment advisor.
This report has been prepared solely for information purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any financial products. It should not be regarded as a substitute for the exercise of the recipient’s own judgement.
No Intesa Sanpaolo S.p.A. or Banca IMI S.p.A. entities accept any liability whatsoever for any direct, consequential or indirect loss arising from any use of material contained in this report.
This document may only be reproduced or published together with the name of Intesa Sanpaolo S.p.A. and Banca IMI S.p.A.. Intesa Sanpaolo S.p.A. and Banca IMI S.p.A. have in place a Joint Conflicts Management Policy for managing effectively the conflicts of interest which might affect the impartiality of all investment research which is held out, or where it is reasonable for the user to rely on the research, as being an impartial assessment of the value or prospects of its subject matter. A copy of this Policy is available to the recipient of this research upon making a written request to the Compliance Officer, Intesa Sanpaolo S.p.A., 90 Queen Street, London EC4N 1SA.
Intesa Sanpaolo S.p.A. has formalised a set of principles and procedures for dealing with conflicts of interest (“Research Policy”). The Research Policy is clearly explained in the relevant section of Banca IMI’s web site (www.bancaimi.com).
Member companies of the Intesa Sanpaolo Group, or their directors and/or representatives and/or employees and/or members of their households, may have a long or short position in any securities mentioned at any time, and may make a purchase and/or sale, or offer to make a purchase and/or sale, of any of the securities from time to time in the open market or otherwise. Intesa Sanpaolo S.p.A. issues and circulates research to Qualified Institutional Investors in the USA only through Banca IMI Securities Corp., 245 Park Avenue, 35th floor, 10167 New York, NY,USA, Tel: (1) 212 326 1230. Residents in Italy: This document is intended for distribution only to professional investors as defined in art.31, Consob Regulation no. 11522 of 1.07.1998 either as a printed document and/or in electronic form. Person and residents in the UK: This document is not for distribution in the United Kingdom to persons who would be defined as private customers under rules of the FSA.
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Intesa Sanpaolo S.p.A. trading ideas are made in both a very short time horizon (the current day or subsequent days) or in a horizon ranging from one week to three months, in conjunction with any exceptional event that affects the issuer’s operations. In the case of a short note, we advise investors to refer to the most recent report published by Intesa Sanpaolo S.p.A’s Research Department for a full analysis of valuation methodology, earnings assumptions and risks. Research is available on IMI’s web site (www.bancaimi.com) or by contacting your sales representative.

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