December 8, 2022

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Stock exchanges, US inflation, and China’s zero-cut Covid measures push the lists

(Il Sole 24 Ore Radiocor) – The slowdown in US inflation, along with the severe “Covid zero” measures in China, is supporting European stock exchanges which, after Eve race, aim for more altitudes and travel at altitude, albeit with different changes in speed. The US price index, in fact, below expectations, doubles the hope of operators that the Federal Reserve will soon slow the pace of rate hikes. But during the night, there was also news of Beijing for the first time easing its strict anti-Covid quarantine rules, kicking off the Asian roster race (Hong Kong, at the moment, is gaining more than 7%).
So after Wall Street closed its best session since 2020, European indices are also aiming for a repeat rally: FTSE MIB From Milan until he got a point, only to fall back a bit, the same goes for CAC 40 Paris and FT-SE 100 from London. More background DAX 40 In Frankfurt, with Germany confirming inflation at +0.9% in October (+10.4% over the year). And we’re also looking at the result, as yet unclear, of the US midterm elections: President Joe Biden’s Democratic Party appears to have avoided the obvious defeat it was predicted to have.

EU Estimates: Recession Coming for the Eurozone and Italy

Two quarters of negative growth in the last quarter of this year and the first quarter of next year in several countries including Italy, Germany and France. New estimates from the European Commission indicate this. “Between high uncertainty, high pressures on energy prices, eroding household purchasing power, a weaker external context, and more restrictive financing conditions, the European Union, the eurozone and most member states should lead into recession in the last quarter of the year,” says Brussels. In the last quarter of this year, growth in the eurozone will be negative, -0.5%. It will also remain negative in the first quarter of 2023 (-0.1%) to recover in the second quarter (+0.2%). In Italy, growth will fall to -0.3%, in Germany to -0.9% (the worst figure in the region), in France to -0.2%, in Spain to -0.3%. In the first quarter of 2023, Italy will remain negative (-0.3%, rising in the second quarter to +0.1%), Germany (-0.3%), France (-0.1%) while Spain will be at 0. Looking at the numbers, the Commission has It improved the estimate for Italian GDP growth this year to 3.8% and lowered that for next year to 0.3%. In 2024, GDP is assumed to reach 1.1%. In the summer, it forecast 2.9% this year and 0.9% next year. For the eurozone, GDP growth estimates for this year have been raised compared to those for the summer to 3.2%, and in 2023 it will be 0.3% to 1.5% in 2024.

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In Milan, all eyes are on Unipol, A2a and Mps after the accounts

With the spread stabilizing in the region of 200 points, and the yield on ten-year BTPs once again above 4%, Piazza Affari is highlighted. A2aAnd that is after closing the accounts with a profit that rises to 461 million. Also fine with luxury Moncler And the oil rebound, in the wake of crude oil, with Tenaris. weak Unipol, at the bottom of Ftse Mib, which in the nine months collected a profit of 854 million (+5%). eyes on Mps Bank After the “red” 794 million in the third quarter for non-recurring costs on personnel expenses.

BTP/Bund spread trend

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Stable spread in the area of ​​200 pips

A stable trend in the spread between BTp and Bund in the MTS electronic secondary market for European government bonds after a session dominated by strong purchases of eurozone bonds and a collapse in yields after the publication of better-than-average US inflation data. wait. The spread between BTp and the Eve bund remains 200 basis points, a limit not seen since last July. The benchmark 10-year BTp yield is back at 4.05% after falling to 4%, to its lowest value since mid-September (it was 4.27% at the close on Wednesday). The yield on German bonds also rose to 2.07% after yesterday’s drop to 2% from 2.25% from the previous reference.

BTp: The first BTp Green 2035 auction, awarded titles for 3 and 7 years

The start of the auction for BTp Green ending on April 30, 2035 which was awarded by the Treasury for $2 billion with a total return of 4.26 percent. The amount requested was 3.127 billion for a coverage ratio of 1.56. At today’s auction, three-year BTp was also put up for 2.75 billion and seven years for 4 billion, bringing the auction total to 8.75 billion. In detail, the third tranche of the 3-year BTp, due on January 15-2026, was allocated at 2.75 billion (4.893 billion orders), with the total return 35 basis points lower than last month’s record, at 3.22%. The first installment of the new BTp was also allocated for a period of 7 years, maturing 12-15-2029, against 4 billion (5.695 billion orders), with the total return also in this case down 41 basis points from the October record, to 3, 84 percent.

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