The Fed chairman Jerome Powell he stays out of trouble, disappoints hawks and doves by speaking in Stockholm, and leaves markets stalled, awaiting Thursday's US inflation data.
I price lists Europeans thus closing a session with little movement, in which profit-taking prevailed after the run at the beginning of the year. The final photo see Business Square practically flat (-0,08%) at 25.364 basis points, preceded by Madrid +0,24%. They are more backward Paris -0,55% Amsterdam -0,43% London -0,4% Frankfurt -0,15%.
The trend is not much different a Wall Street, which is currently traveling around parity.
Il dollar it is partially recovering against the other currencies, but the euro holds up and trades on yesterday's levels around 1,073.
The line is nearly flat for the Petroleum, while the sales hit the T-Bonds, which show falling prices and rising yields (3,62% on the ten-year period). What weighs on US government bonds are not so much Powell's words today, but the views expressed yesterday by some Fed officials, according to whom rates, which currently stand at 4,25%-4,5% will gradually rise to 5%-5,25% this year and will remain at that level “for some time”.
Powell: Price stability is key
“Price stability is the foundation of a healthy economy and delivers immeasurable benefits over time,” Federal Reserve Chairman Jerome Powell said today at a Swedish central bank event. The Fed is "strongly focused" on bringing inflation under control, even though the measures it has taken, namely rate hikes, "could be unpopular" and could "fuel political opposition". Precisely for this reason the central bank is not subject to the control of politics. Its independence is sacred, as is its mission; therefore, the US central bank will not even become a climate policy maker.
Interesting topics that mark a difference with the ECB's attitude on the climate issue, but which say very little about the pace and timing of a rate hike this year and on the move expected at the next meeting on January 31st-February XNUMXst.
According to Reuters, the markets are currently estimating a peak in rates below 5% by mid-year, then a drop of half a point by December. A different scenario from the one hypothesized yesterday by Raphael Bostic and Mary Daly, heads of the Atlanta Fed and the San Francisco Fed respectively (both this year are not voting in the Fomc, the monetary policy arm of the Fed), who hypothesize rates above 5% and long. For Bostic, however, the Fed will be able to ease the pace of the hikes, if Thursday's data on consumer prices show a slowdown.
Stockholm Syndrome could have hit European markets and eurozone government bonds instead, after the words of Isabel Schnabel, of the Executive Committee of the ECB, which attended the same event as Powell in Sweden. For Schnabel, interest rates in the euro area have yet to rise "significantly" bringing financial conditions towards restrictive levels, because "inflation will not come down by itself". A aggressive attitude, in a context in which the World Bank revises its 2023 global growth forecasts sharply downwards, cutting them to +1,7% from +3% last June, due to persistent inflation, the increase in interest rates and effects of the war in Ukraine. The economic slowdown will be significant in the US and in Europe growth will be zero at all.
At bloc level, however, the European Commissioner for Economic Affairs, Paolo Gentiloni, said the expected contraction in the fourth quarter of 2022 and the first quarter of this year will be less than previous projections.
Spreads down
Government bonds in the euro area have faced all of today's statements and the international body's forecasts with great aplomb.
The Italian card closes in green, with lo spread which falls back to 190 basis points (-3,92%). Yields rose slightly: that of the 10-year BTP at the end was indicated at +4,19% (from 4,18% yesterday) and that of the Bund with the same duration at 2,3% (from 2,21%).
Square Business: Fineco, Poste and Stellantis did well
On the Ftse Mib, the biggest increases today are for managed savings, with Finecobank +1,17% and post office +1,17%.
In the automotive sector it shines stellantis +0,77%, which was included by Equita in the 2023 list of preferred stocks. The broker confirmed the "Buy" recommendation. It is confirmed in money Iveco +0,87%, down instead Ferrari -1,16%.
Among the banks are in evidence Understanding +0,97% and Bper +0,81%, while Ps (-3,56%) pays the price after yesterday's double-digit leap.
Raise your head Generali +0,87% and there was some momentum on utilities with A2a +0,72% and Snam +0,65%, but Enel loses 1,12%.
The list of "bad guys" starts from Moncler -1,48%, They retreat Campari -1,28% and Prysmian -1,26%.
Outside the main basket, the race does not stop Saes Getters, after the announcement of a binding agreement for the sale of the Nitinol business to the US company Resonetics for a price of 900 million dollars, equal to about twice the market capitalization. Ordinary shares mark +9,71% and savings +12,73%.
Finally, it is appreciated Saras +3,24%. The company announced yesterday evening that the Isab refinery in Priolo owned by Lukoil will be sold to Goi Energy and the sale, according to press sources, is worth 1,5 billion euros.
