In the minutes of the last ECB meeting, Reuters points out, there is no mention of the relationship between the euro and the dollar. Yet, just in the last few weeks, the prospect of the US currency overtaking the single currency has taken shape, traded this morning at 1,015, at its lowest for twenty years. During 2022, the decline was 10%, with significant effects.
The single currency slips to 1,015, spread to 203
As regards inflation, it is calculated that each point of devaluation has an effect on the cost of living equal to 0,1%. And it is not difficult to predict that the trend will continue: the United States are preparing to raise rates again (75 points at the end of the month, another 50 in September) and the ECB will respond with a 25-point increase in July, but only in September the season of negative rates for deposits with the ECB will end.
In the meantime, the feeling is growing that it will be very difficult to free oneself from the blackmail on energy, a sword of Damocles which, combined with the risk of "fragmentation", imposes a policy of low interest rates on the euro area, a partial remedy for the recession. Hence the market feeling that the run on the dollar will be the dominant factor in August, unless the next earnings campaign rains down a barrage of bad news on Wall Street.
Positive Tokyo, stimuli on the way to the Chinese economy
The rise in Asian stock markets was held back overnight by the news of theattack on former Japanese Prime Minister Shinzo Abe, hit by two bullets during an election rally. At the moment, the Japanese stock market is up 0,8% (+2,8% the weekly balance).
Hong Kong's Hang Seng is around parity (-1% per week). The CSI 0,2 of the Shanghai and Shenzen stocks rose by 300%, the index closed the week slightly down. Beijing's Finance Ministry is working on a super program to finance new infrastructure works: local authorities will be allowed to borrow up to 1.500 billion yuan (220 billion dollars) through the issuance of special bonds. Loans should benefit from a preferential and facilitated route, in order to close the collection by the end of the year.
Seoul's Kospi gains 0,7% (+2% over the week, illuminated by Samsung's upward estimates), Mumbai's BSE Sensex +0,3%.
Milan experiences the best session since March, the Eurostoxx recovers
European stock exchanges should open around parity: the future of the EuroStoxx50 marks a slight decline after a brilliant session; the index (+1,8%, to 3.622 points) returned to the levels of the previous lows in March, confirming the goodness of the supports towards 3.434 points, where the long-term moving average transits.
Milan (+3% to 21.558 points) also scored the best session for four months.
The spread restarts this morning from 203 points: The yield of the BTP rises this morning to 3,29%, slightly more than the Bund (1,24%).
The pound reacts up (1,20 53 against the dollar +0,22%) to the resignation of Boris Johnson.
The Nasdaq flies, spotlight on the job market
Wall Street futures are down on the day of the release of the jobs data. The consensus expects a change in non-farm wages to 268 thousand, from 390 thousand last month. Unemployment is expected stable at 3,6%. Hourly wages should drop slightly to +5% year-on-year, from the previous +5,2%.
Each of the six million unemployed people in the United States has nearly two job vacancies, one ratio historically very high, but has been declining for a couple of months. A further decline could help cool inflation. James Bullard, the Fed's hawk, said he was confident that the US economy could avoid the recession, but limit itself to a softer "soft landing".
Yesterday the Nasdaq closed up 2,3%, the fourth consecutive session in positive territory, an event that had not occurred since the end of March.
The 3-year Treasury Note is just under the 2,98% yield mark, up slightly to XNUMX%.
Weak commodities, gold at lows
Commodities eased overnight after rallying on rumors of a new stimulus plan for the Chinese economy. The Bloomberg Commodity index moved little, +4% yesterday.
WTI oil is trading at $103. Brent $105.
Gold at 1.741, on the lows for the period.
Moving titles: Leonardo, Stm, Tenaris. Stalemate generals
Leonardo: Oddo raises his judgment from Hold to Outperform, target 12,5 euros.
Stm can be driven by the excellent results of chip manufacturers: Taiwan Sem. announces June revenues above expectations with growth slowing down, but less than expected.
Tenaris bought Benteler Steel & Tube for $460 million.
In the evening, a new meeting at the top of Generali to replace Francesco Gaetano Caltagirone as vice president. The minority insists on the name of Luciano Cirinnà, but the company opposes two legal reasons why the former manager is not compatible: dismissal and the open lawsuit with Generali.
