It is a black Monday that closes today on the European markets and also Wall Street is trading sharply lower as hopes that inflation has peaked and that central banks have an opportunity to catch a breather have faded.
The sales thus affect the share and even more the bond.
Last week, ECB communications and the trend in consumer prices in the US helped to freeze expectations, while on Wednesday the Fed could decide to increase rates by 50 basis points or even by 75 points.
The continental session sees losses of 2,79% a Business Square, which falls back to 21.918 basis points, below the psychological threshold of 22 points as has not happened since 8 March. The budget is similar to Amsterdam -3% Paris -2,67% Frankfurt -2,43% Madrid -2,5% London -1,59%.
In the US morning, in New York, the Dow Jones dropped almost 2%. Nasdaq it retreats more than 3,5% and the S%P 500 is down 2,8% and could end the session in bear territory, ie more than 20% down from its record. The Nasdaq Composite is already in this situation and is down 27,5% since the beginning of the year and 30% from last November's record.
Escape from government bonds
The expectation of a tightening by central banks puts investors on the run from government bonds.
The Italian secondary closes in deep red, with lo spread which rises to 237 basis points (+5,19%) after even exceeding 240 points. The 3,99-year BTP rate closed at 4%, after reaching 2014% in the session, a level not seen since January XNUMX.
Even the Bund, negative until a few months ago, shows rising yields. The 1,62-year bond rises to 1% and even the two-year bond is back above XNUMX% as it hasn't happened for over a decade.
“There is little to say. The only way to reverse the trend of the markets is for the ECB to say something more specific about a possible anti-spread shield. The rate situation is very complicated,” notes a trader quoted by Reuters.
The turbulence is even stronger in the USA, where we are witnessing a wave of sales of government bonds and, for some time, also to the feared inversion of the yield curve between the 2-year bond and the XNUMX-year bond.
Currently, the 2-year bond shows a rate of 3,22% and the 10-year bond of 3,3%.
The inversion of this part of the curve is considered by many to be a decisive signal that a recession could come in the next year or in 2024.
This as analysts at Barclays expect a 75 basis point move from the Fed on Wednesday, rather than the 50 basis points expected.
Purchases reward the dollar
Risk aversion favors the dollar, with the euro sliding to 1,042, down about 0,9%. Sterling fared even worse, alarmed by lower-than-expected economic growth in April. Waiting for the BoE to intervene on rates at Thursday's meeting is not enough to support the British currency. The Boj will meet on Friday, the only major central bank to maintain an ultra-accommodative stance.
A choice that weighed on the yen in this period, which is now partially recovering.
Vanno cryptocurrencies down. Bitcoin loses almost 18% and moves around $23, its lowest level since December 2020. Celsius, one of the world's largest cryptocurrency lending companies, has decided to suspend withdrawals due to extreme market conditions. We are adopting this measure today - explains the New Jersey group in a statement - to put Celsius in a better position and to be able to honor its obligations regarding withdrawals over time".
Among the raw materials, Brent-type oil fell (-1,57%, 120,09 dollars a barrel), which looks at the new anti-Covid restrictions decided by Beijing.
Saipem collapses in Piazza Affari
Among the blue chips of Piazza Affari, almost all negative, it is Saipem to wear the black shirt, -14,83%, not only due to the drop in crude oil, but because from today the reverse split of ordinary and savings shares in a ratio of 1 to 10 is operational in view of the capital increase.
Financial stocks are also suffering, starting with nexi -7,89%, which reaches new historical lows.
Among the banks the worst is Bpm bank, -4,91%. The letter continues to hit asset management, Finecobank -5,05% Banca Mediolanum -4,66%. In the automotive sector, the biggest discounts are paid by Iveco -7,18% and Pirelli -5,85%. The global wave of sales on technology involves stm, -5,53%. Among utilities stands out in the negative Ivy -4,52%. In the health sector Amplifon loses 7,19%.
There are only two big caps bucking the trend: Campari +1,86% and Recordati + 1,46%.
