Black Monday is expected for stock exchanges in Europe. The intense closing of listings in Asia indicates what will be the “mood” of investors and the tension is reflected starting with futures, index contracts, however on Eurostoxx 50 which yields more than 2 per cent. FTSE 100 futures are down 1% and US futures are down 1.9%, while MSCI Asia Pacific is down 2.7%.
The spread between the BTP and the Bund is widening further, now at 228 points and the yield on Italian government bonds reaches the record high already seen on Friday, rising to 3.79%, again at the highest levels since 2014.
The collapse of the stock markets in Asia, feared by higher-than-expected US inflation and with renewed Covid-19 restrictions in China weighing on investors’ appetite for risk. The MSCI Asian Markets Index fell to -2.4%, and Hong Kong (-3.6% currently), Japan (-3%) and South Korea (-3.4%) were among the main speculators. Shares in Southeast Asia have been relatively resilient, with benchmarks in Singapore and the Philippines dropping less than 1%. Shanghai (-1.2%) and Shenzhen (-0.8%) also contained losses. All eyes are on the Fed’s next moves.
The yen continues its weak phase against the dollar, bringing the record to a 23-year low of 135.20, amid expectations of a widening interest rate differential between the US and Japan. The US Federal Reserve and Bank of Japan (Boj) decisions are expected this week, but in opposite directions: with the cost of money in America expected to increase to contain inflation and the confirmation of extreme monetary policy. . Expansive by Governor Haruhiko Kuroda. The decline of the yen, to its lowest level since October 1998 at the exchange rate against the dollar, resulted in the first reactions of the financial authorities in Japan. Bank of Japan Governor Kuroda, at a parliamentary hearing, said that the sudden depreciation of the currency has negative and undesirable effects on the country’s economy, as it increases uncertainty and complicates companies’ plans.
The institute’s number one said the Bank of Japan will continue to monitor developments in money markets and their impact on the economy and prices, in coordination with the Tokyo government.
Although the weak yen in principle facilitates exports, it also leads to increased import costs, in a sensitive period of the economic situation in Japan, which translates into increases in energy bills and in general in consumer prices, eroding the purchasing power of consumers .