Milan – The risk of escalation in the Middle East continues to spook markets – stock markets begin to decline again in the final session of the week with oil above $90 and gold in the $2,000 range an ounce, a climate thermometer of anxiety among investors. Weak session in Asia, with Tokyo closing at -0.54%. On the other hand, US yields resumed rising, with 10-year Treasuries reaching 5%, for the first time since 2007. European stock markets closed lower at Avary Square by 1.40%.
Deep Red Europe: Avary Square -1.40%
European stock markets closed the last session of the week in deep red. Piazza Affari shares, which are awaiting the Standard & Poor’s rating for Italy, lost 1.40% with the Ftse Mib index reaching 27,357 points. The decline is in line with the decline of other European stock markets: Frankfurt closes at -1.64%, London records -1.33% and Paris loses 1.52%. The session also continues to be negative on Wall Street, with the Nasdaq losing 1.40% and the Dow Jones recording -0.52%. In Piazza Affari, the best performer was Nexi, which rose by 2.54%. Black jersey Saipem (-6.22%), Iveco (-4.65%), MBS (-3.97%). Telecom shares also saw a sharp decline, closing at -3.67, after Vivendi asked to submit Kkr’s bid for the network to an extraordinary meeting.
European stock markets close lower after Powell
European stocks closed lower after hawkish comments from Federal Reserve Chair Jerome Powell who said the strength of the US economy and continued tension in the labor market may require tighter lending conditions to control inflation, leaving the door open to the possibility of higher interest rates. Investors also remain fearful of escalating conflict in the Middle East.
The CAC 40 index in Paris lost 1.52% to 6,816.22 points, the DAX 30 index in Frankfurt fell by 1.64% to 14,798.15 points, and the FTSE 100 index in London recorded a decline of 1.33% to 7,400.12 points. In Piazza Affari, the FTSE Mib leaves 1.40% on the ground at 27,357.
10-year Treasury bonds hit 5% for the first time since 2007
The US 10-year Treasury yield briefly touched 5% for the first time since 2007, after Fed Chair Jerome Powell said monetary policy is not overly restrictive at the moment and that the Fed is proceeding cautiously and will decide next steps based on macro data. And expectations. Evolving economic prospects. The yield on benchmark US stocks has now fallen to 4.9328%.
The first Fed chief’s comments at the Economic Club of New York are consistent with the message in the FOMC minutes. Comments from many Fed officials are mixed on the need for further rate hikes, but there appears to be consensus in their commitment to keeping borrowing costs at constrained levels in order to curb inflation. On the data front, new unemployment claims again fell below expectations, but continuing claims increased for a fourth week. Other economic data released this week – including existing home sales, retail sales, industrial production, new housing starts and building permits – surprised to the upside, adding more evidence that the US economy remains strong.
Europe remains negative after Wall Street
The decline of stock markets in the Old Continent after the start of Wall Street was confirmed: all stock markets are trading fairly volatile with losses of around 1 percentage point (s.p. -0.8%), with expectations in Italy focused on a possible revision. From the Standard & Poor’s rating at the close of US stock prices. Moscow performed well (+1%) with the MOEX dollar index up 1% following a 2 percentage point rise in the gas price to €51 per megawatt hour and the oil price to just under $90 per barrel.
Government bonds are stressed by the constant movements in yields between negative and positive territory: the 10-year bond rate is 4.9% and the spread against Germany is 201, after starting at 202 basis points.
In this context, Saipem’s decline continues in the Avari arena (-4.5% to €1.47), with Iveco losing four points. MPS and Poste both fell by around 3%, with TEM losing 2 percentage points to €0.26. Nexi, on the other hand, performed well, rising 3% to €6.66 assuming that in addition to CVC, other funds were evaluating a bid for the payments group.
Georgette: “Standard & Poor’s judgment does not depend on gossip”
A properly structured budget law has been written: in our opinion, it will find the assessment of the rating agencies that have read it and certainly do not base their assessments on gossip and tabloid headlines,” said Bolzano’s Minister of Economy and Politics. Finance, Giancarlo Giorgetti, talks about the budget law and answers… Question about the possible negative opinion by Standard & Poor’s that will be expressed this evening regarding Italy.Today Giorgetti is also in Alto Adige to support the election campaign in view of the provincial elections on Sunday.
Europe begins a sharp decline
Europe opens dramatically: Milan records -0.8%, Paris -1%, Frankfurt -1.1% and London -0.4%
The spread opens flat at 202
The spread between BTP bonds and German bunds opened the session flat at 202 basis points, with the Italian 10-year bond yield at 4.94% in the secondary market and the German Bund yield at 2.92%. The yield on Spanish bonds is 4.02%, while the yield on 10-year Greek bonds is 4.39%. Yesterday’s session started with a sharp rise at 208 basis points, but closed with a decline at 202 points.
Asia declines as oil rises
Asian stock markets are weak and affected by fears of an escalation in the Middle East, pushing oil prices above $90 per barrel and gold to nearly $2,000 per ounce. Meanwhile, Federal Reserve Chairman Jerome Powell’s openness to the possibility of keeping interest rates at current levels gave a boost to US Treasuries, causing their yields to decline. Tokyo lost 0.54%, Hong Kong recorded a decline of 0.7% even if property stocks recovered due to the possibility of a debt restructuring of Country Garden while the fate of Evergrande remains hanging by a thread.
Shanghai and Shenzhen performed worse (-0.9% and -1% respectively). The declines in Seoul (-1.69%) and Sydney (-1.16%) were more pronounced.
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