October 6, 2022

Hardwood Paroxysm

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European stock exchanges are cautious, in Milan Unicredit stands out in Germany’s M&A bet

BTp, spread stable at 226 pips

A stable spread session between BTp and Bund. The yield difference between the ten-year BTp benchmark (Isin IT0005494239) and the same German maturity is indicated at 226 basis points, the same as the previous value. On the other hand, the benchmark 10-year BTp yield, which settled at 4.08% in this first phase, is up, compared to 4.05% at the previous close.

Germany, +7.9% producer prices in August

Germany’s Industrial Producer Price Index rose 45.8% y/y in August. This was announced by the Federal Statistical Institute Destatis, noting that this is the highest trend increase ever (in July it was +37.2%, in June 32.7%). Compared to July 2022, the PPI is up 7.9%: even on a trend basis, this is the highest increase ever. The main factor responsible for the price increase is energy, but significant increases have also been recorded in other categories

Japan, core inflation at its highest level in 2014. Tokyo rise

Japan’s core inflation (excluding volatile products, such as fresh food) was 2.8% in August year-on-year, according to data released today by the government: This is a new high since October 2014, mainly due to the rise in energy prices. With the exception of 2014, when prices were artificially raised through an increase in value-added tax, inflation in August was the highest recorded in Japan since 1991. The August figure is also slightly higher than analysts’ expectations, which stood at 2.7%. The Tokyo Stock Exchange closed trading up about half a percentage point (Nikki 225), while the exchange rate between the dollar and the yen rose to the region of 143.40.

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China’s central bank leaves interest rates unchanged

China’s central bank PBOC left two key interest rates unchanged. The one-year basic loan rate (Loan Prime Rate, Lpr), which forms the benchmark for the best rates banks can offer businesses and households, remains at 3.65 per cent. The 5-year loan prime rate, the benchmark for five-year mortgages, also remained steady at 4.30 percent.