(Il Sole 24 Ore Radiocor) – In the wake of the high tension session, with the indices of the Old Continent losing more than two points (Milan -2.7%), European stock exchanges are trying to replace themselves and travel higher, trying to ignore the sales they made that hit Wall Street (-2% Dow Jones, Standard & Stocks are below 4,000 points for the first time since March 2021 and Nasdaq -4.3% minimum since November 2020), hence the Asian markets.
According to experts, this is a technical revival since then However, the apprehension did not diminish, on the one hand, due to the sudden rise in interest rates by the Federal Reserve, despite the assurances of US Central Bank President Jerome Powell (the decisive figure for US inflation tomorrow), and on the other hand for the case he asks, given that in China, the world’s first oil importer The closures and restrictions made necessary by the increase in infections from Covid-19 continue. So investors fear an “imminent deterioration in economic conditions,” according to IG analysts.
Also in the background is the development of the conflict in Ukraine, which will also be among the hot topics of the meeting between Prime Minister Mario Draghi and US President Joe Biden in Washington. Thus the FTSE MIB in Milan soared, returning just over 23,000 points, the CAC 40 in Paris, the DAX 40 in Frankfurt, the FT-SE 100 in London, the IBEX 35 in Madrid and the AEX in Amsterdam.
Eyes on the Fed’s moves
To restore price stability, the Fed embarked on the steepest rate hike since 1980 accompanied by a rapid reduction in the balance sheet, which rose to $9 trillion with the pandemic. After raising interest rates by a quarter point in March, the US central bank adjusted them by another half a point in May and opened the door for a series of 50 basis point hikes in upcoming meetings. The pressure, the fear of economists and investors, risks sliding the US economy into recession, not yet fully recovering from the pandemic, or even worse, into stagflation.
The Federal Reserve, in its semi-annual Financial Stability Report, states that persistent high inflation along with a sudden rise in interest rates are among the main short-term risks to the US financial system. The central bank also warned that the war in Ukraine could affect financial stability as well as the global economy as noted by Treasury Secretary Janet Yellen.
In Piazza Afari, Bper clicks after the calculations, good car
In terms of securities, in almost all positive Ftse Mib, Banca Pop Er especially stands out, following first-quarter accounts that showed a decrease in profits to 112.7 million, but still higher than expected. Also highlights Saipem, the company is accelerating the timing of sales and raising capital by $2 billion, which can be achieved by summer, CEO Francesco Caio said in an interview with 24 single substrate. Auto stocks also recovered (good Pirelli & C, Stellantise Iveco Group), which on Monday were among the hardest hit, along with energy. The latter continues today on the path of weakness, especially since after the sharp declines this evening, with crude oil losing more than 5 points, oil continues to decline. At the bottom Atlantia, on par, and Leonardo – Finmeccanica, shocked by the post-session achievements in contrast to the rest of the roster.
Spreads are rising again, 10-year yield remains above 3%
Slight increase in spread between BTp and Bund. The yield difference between the ten-year BTp standard (Isin IT0005436693) and the German term itself is indicated at 204 bp, one point more than the previous final. The benchmark 10-year BTp yield rose slightly, balanced above the 3% threshold, to 3.15% from 3.14% overnight.
Oil is still low and the euro is stable
After Monday’s sharp declines, in which crude oil lost more than 5 points, oil continues to decline: West Texas Intermediate contracts for June fell 0.9% to $102.15 a barrel, and Brent contracts in July lost 0, 85% at 105.04 euros.
In the currency market, the euro did not move much against the dollar and traded at $1.0573 (1.057 yesterday’s close) and 137,827 yen (137.9 overnight). The exchange rate of the dollar against the yen at 130.36.