La US central bank raised the cost of borrowing, as expected. The 75-point interest rate is now at 3-3,25%, the highest since 2008. But the squeeze won't stop there: at the end of the year, according to the Fed, rates will reach 4,4%, to then settle at 2023% in 4,6. I am figures higher than analysts' expectations.
Powell's announcements had an immediate effect on price lists. The European stock exchanges, returning from an upward session (in Piazza Affari the Ftse Mib index +1,2% to 22.035 points) are preparing for a sales rain: the Eurostoxx future signals a start at -1,7%.
Derivatives on US lists were also negative. Yesterday, after an up-and-down session, New York markets closed with a minus sign: S&P -1,7% Nasdaq -1,8%.
Rates are also up in the UK, Switzerland and Norway. Only Japan resists
The tightening of markets will continue today. There Bank of England will raise rates by half a point, as will the Bank of Norway. The Switzerland the USA will follow with an increase of half a point. The exception is Japan, which decided to confirm the zero interest rate policy.
In the night the exchange of the yen it slipped to 185,13 against the dollar, a 24-year low. The pound is doing worse, having slipped to 1985 levels. The euro is also down, just above 0,98 against the US currency, the lowest in the last twenty years.
Moscow -4,7%: a queue of 35 kilometers of people fleeing
The fall of the markets is obviously also linked to the Putin's threats. The Russian president has announced the mobilization of 300 reservists to be deployed on the Ukrainian front, adding that the country is ready to use any means to defend itself from the West. There Moscow Stock Exchange suffered a new strong decline (-4,7%).
A few hours after Putin's words, airline tickets for flights departing from Russia literally sold out: the favorite destinations for fleeing citizens are Dubai, Istanbul and Doha. This morning, at the border with Finland, the queue to leave the country reached 35 kilometres.
The US yield curve is inverted
The Fed's announcements have had a disruptive effect on the short-term end of the US debt: the two-year Treasury Note has reached a yield of 4,15%, from 3,98% yesterday, at the end of the session it was 4,11%. All calm on longer maturities: the 3,54-year bond rose to 55%, more or less the levels of the day before. The yield curve, as a result of these stresses, has inverted even more, the ten-year-two-year spread is at XNUMX basis points.
Schnabel (ECB): towards an increase between 0,50/0,75%
The pressure is also felt on the euro area bonds. Yesterday spread under control at 224 basis points. But the ball now passes to the ECB and the hawks are making themselves heard: inflation is still too high and therefore interest rates must continue to rise, said Isabel Schnabel. “A looming recession would have a dampening effect on inflation,” Schnabel said in an interview with German website t-online. “However, the starting point of interest rates is very low, so it is clear that we must continue to raise them.” Market expectations are for an increase of 50/75 basis points in October.
Asia holds back, Hong Kong follows the US dollar
Monetary policy and macro tensions are influencing all equity markets.
A Tokyo the Nikkei index falls (-0,6%), despite the weak yen. The CSI 300 index of the lists of Shanghai and Shenzhen loses 0,8%. Kospi of Alone -1%. BSE Sensex of Mumbai -0,2%.
The Hang Seng Stock Exchange Index of Hong Kong loses almost 2%, to 18.089 points, the lowest since December 2011. Tonight the former colony's Monetary Authority raised rates by 75 basis points, to 3,5%, with immediate effect and hand in hand with the measure adopted by the Fed, bringing the cost of borrowing in the local market to the highest level since the 2008 financial crisis. "There is a high probability that Hong Kong will record negative GDP growth this year," warned the secretary of Finance Paul Chan.
Slow down the rush of gas in Europe
Petroleum Brent and WTI up 0,5% after two consecutive sessions of declines. Texas crude trades at $83,3 a barrel. Brent at $90,2. Reuters reports that at least three large state-owned refineries, plus one privately owned one, are considering ramping up production to meet a demand surge expected next month.
Always very volatile scenario on natural gas. The US one lost 0,6% to 7,73 dollars. European gas lost 2,3% to 189 euros per MWh, but Putin's belligerent statements sent it up to 214 euros in the morning.
It will happen in Piazza Affari: Telecom, Leonardo, Nexi
Still under tension Telecom (+5,71%), yesterday in fibrillation in the face of the movements in the telecommunications sector unleashed by the purchases of Xavier Niel (Iliad) who acquired 2,4% of Vodafone.
In great dust too Leonardo (+5,54%) in the context of a general race in the defense sector.
In the spotlight today nexi, one of the bidders for Spain's Banco Sabadell's payments division, reports Reuters.
Banco BPM. The agreement between shareholders intends to ask for a seat on the board of directors which will leave the meeting in April 2023.
Atlantia. As part of the voluntary takeover bid promoted by Schema Alfa, the Bank of Italy issued the authorizations required in relation to the purchase of a qualified indirect stake in Telepass.
Aeffe it plans to raise prices "by a few percentage points" for its brands to meet rising costs and to protect margins, executive chairman Massimo Ferretti said.
