La ECB raises rates again by 25 basis points and takes them to an all-time high, while inflation in the United States travels stronger than expected, yet i European lists today they close in progress, taking courage after the words of Christine Lagarde. Also Wall Street moves in tune at the end of the morning, awaiting Arm's debut on the Nasdaq (+0,75%), the largest IPO in New York since November 2021. A stellar debut is anticipated.
It might seem like an upside-down world on the stock exchanges today, taking into account the attitude that the financial markets have had up until now towards the tightening of the central banks, but that's the case.
Business Square it appreciated by 1,37% to 28.872 basis points, with banks suddenly changing mood, encouraged by Eurotower's decisions and utilities rallying, in the face of falling yields on the secondary market.
The picture is similar in the rest of the single currency area: Frankfurt + 0,97% Paris + 1,19% Amsterdam + 1,3% Madrid +1,39%. Off the block it stands out London, +1,95%, with the oil majors galvanized by the rise in crude oil.
Il wtf in fact it reaches 90 dollars a barrel (+1,7%), while the Brent trades at 93,5 dollars a barrel (+1,85%). On the foreign exchange market, the tenth rate hike by the European Central Bank is not enough to support theeuro, which loses more than half a percentage point against the dollar for an exchange rate of 1,066.
Hopefully, the European squeeze has come to an end
In the heat of the moment, the explanation given for this positive market reaction is that the path of the ECB's increases has come to an end. Contributing to this reading are the words of the press release: “The Governing Council believes that rates have reached levels that, if maintained for a sufficiently long period, will make a substantial contribution to a timely return of inflation to target. Future decisions will ensure that the ECB's key interest rates are set at sufficiently restrictive levels for as long as necessary." Furthermore Frankfurt revised the bloc's growth forecasts downwards (+0,7% in 2023, +1% in 2024, +1,25% in 2025), even if it revised inflation forecasts upwards (+5,6% this year, +3,2% in 2024, +2,1% in 2025). In any case, the decision to bring the main rate to 4,5% (the one on deposits to 4% and the one on marginal loans to 4,75%) was painful in the board. As President Lagarde explained, there were members who wanted a stop, but evidently the hawks prevailed and "a solid majority" led to today's result.
The spotlight now shifts to Federal Reserve, which will announce its decisions next week. The macroeconomic data coming out in recent days are not exciting if the goal is to tame inflation, but the market continues to bet on a pause by the Fed.
Today it was seen that i producer prices in August they increased more than expected (+0,7% compared to the previous month, against expectations for 0,4%; +1,6% annually, against expectations of +1,3%), while the Retail sales increased for the fifth consecutive month (+0,6%). In the world of work, the people who requested unemployment benefits for the first time in the week ending September 2nd were 220.000 (seasonally adjusted), with expectations at 225.000. The average for the last 4 weeks is the lowest since February. The situation affects the yields of government bonds, which sell for falling prices and rising rates. The two-year US bond yields around 5%.
Piazza Affari, utilities and banks doing well, Tim and Stellantis down
The first a toast the ECB's decision it was there banks, which changed direction after the Frankfurt decisions. They stand out among the best Mps Bank +2,9% and Unicredit +2,38%. In managed savings, it shines Post, + 2,29%.
Another sector in progress is that of utility: Enel it appreciates by 3,2%, with A2a +3,04% ed Ivy + 2,37%.
In industry Prysmian marks a progress of 3,07%. They also bounce Cnh +2,22% and Interpump + 2,23%.
Oil stocks shine, dragged by the rising prices of black gold: Tenaris + 2,56%.
The black jersey of the day goes to stellantis -1.09% which appears nervous (-1,24% also on the NYSE) waiting to understand if the strikes threatened by the union due to the failure to reach an agreement on the new employment contract so far will start in the US factories.
Between and blue chips the auto sector also retreats Pirelli -0,65%. It goes down Telecom Italy -1,02%, following rumors about a new extension of the binding offer for NetCo by KKR, set for September 30th. Neglected nexi -0,32% and Leonardo -0,33%.
The spread narrows, yields fall
The day was also exciting for the Italian government bonds. In fact, he closes the secondary in green with lo spread between 174-year BTP and Bund of the same duration which narrows to 3,33 basis points, marking a decline of XNUMX% from yesterday's closing. Yields are falling: the Italian stock at the closing is indicated at +4,33% (from 4,45% the day before) and the German one at +2,59% (from 2,65%).
