The restrictive policies of central banks, from the Fed (yesterday) to the BoE (today), give wings to government bond yields and depress financial markets in Europe, which closed negative with the exception of London (+0,61%), which sees a glimmer of hope in the future projects of the British Central Bank. Overseas Wall Street is moving downwards after the losses of the eve. The Nasdaq yields more than 1%.
The super dollar is back on the currency market, the pound is down, the euro is weak.
Oil is falling fractionally, while the price of gas is rising.
Negative trading place, but Telecom flies
Business Square limits the damage to 0,42%, dropping back to 22.706 points, but does not stop the race of telecom, 3,22%, with investors betting on a future takeover bid. According to the latest press rumors, the offer on Tim, also aimed at the delisting, could come from Cdp, supported by Vivendi, Kkr and Macquarie. The novelty compared to the hypotheses circulated in the past, underlines Equita, is precisely the involvement of Vivendi.
Outstanding among the blue chips are oil stocks such as Tenaris + 1,41% Eni +1,4% and Saipem +1,28%. The banks are mixed, it is appreciated Understanding +1,28%, but among the minors it is further depressed Ps -5,43% (1,84 euros per share).
Worst big cap of the day is stellantis -3,26%, in an automotive sector weighed down by sales at European level and despite disseminated quarterly revenues are higher than expected. The collapse of the sector weighs on it bmw (-4,32%) after the German automaker warned that rising inflation and interest rates will start to weigh on sales in the coming months.
Bad too Pirelli -2,77%, while waking up Ferrari + 0,36%.
It doesn't stop the bleeding Moncler, -2,78% which updates its lows to 42,26 euros per share, disappointed by the lack of easing of the anti-Covid restrictions in China.
Europe in red with the exception of London. The Moe weighs on the pound
In Europe the heaviest discounts are for Madrid -1,27%, Frankfurt -0,93%, Amsterdam -0,91% Paris -0,54%.
London is the exception, in a "hawk-dove" reading of the BoE, symmetrical and contrary to yesterday's Fed "dove-hawk". In fact, the Bank of England raised interest rates by 75 basis points (in line with what was done by the US central bank), realizing the largest increase in over thirty years and has clarified that further increases will be necessary to reach the 2% inflation target (today it is over 10%) and so far he has been hawkish. He then added, however, that "the peak will be lower than expected by the market". The BoE therefore specified that forecasting a rate above 5% in 2023 would be too damaging for the British economy. This softer stance has improved the mood of the London Stock Exchange, which now seems to be betting on an imminent easing of monetary tightening.
La GBP instead it is in deep red, around 1,11 against the dollar (-1,8%), in light of the recession forecasts made by the central bank: the UK's GDP is expected to fall in 2023 (-1,9% at the end of the year) and in the first half of 2024, to close the year at -0,1% and rise again to +0,7% at the end of 2025.
Among the various European stocks, we note the decline of the German gas importer Uniper (-5,14%), which recorded a record net loss of 40 billion euros. The company is about to be nationalised. It shines on the other hand BNP Paribas (+3,21%), the largest bank in the eurozone, which recorded a higher-than-expected quarterly net profit.
The spread shoots up in the final, yields soar. Lagarde: We are not the Fed
On the secondary market of government bonds the spread between ten-year Italian and German closes with a final flare at 228 basis points (+5,19). The yield of the 10-year BTP it rises to 4,41%, while the Bund slows down at 2,13%.
Weighing on global fixed income are Jerome Powell's words yesterday. The 75 basis point tightening was expected, but the president of the US central bank clarified that there is still a long way to go before bringing inflation under control, therefore the increases will be less incisive but will probably last longer. Inflation data "were once again higher than expected" and it will be necessary to bring rates "to a higher level than expected" in September.
Following this attitude today the prices of T-Bond sThey are going down and rates are going up. The ten-year bond is at 4,187%, but the two-year bond yields 4,72%.
In Europe, ECB President Christine Lagarde distances herself somewhat from Powell and says that Eurotower must be "attentive" to the Fed's policy decisions as it influences global markets, but cannot simply mirror Washington's moves. However, the debate in the bank is heated.
For the president of Bank of Italy Ignazio Visco in Europe one should not expect the ECB to match the increases of the Fed.
