Government bond rally e closing in deep red for the European stock exchanges: investors thus react to the Russian advance on Kiev, where missiles hit the TV tower today.
The first talks that began yesterday between the parties involved did not yield great results, even if negotiations should resume tomorrow. The climate does not bode well and in video link to the European Parliament, the Ukrainian president Volodymyr Zelensky made a new appeal to Europe, "Do not abandon us", while in the US the speech on the state of the Union by President Joe Biden is awaited.
The lists of the Old Continent thus close another session down and Milan, -4,14%, it's the worst. Paris loses 3,94%; Frankfurt -3,85%; Madrid -3,48%; Amsterdam -2,23%; London -1,71%.
Wall Street, yesterday contrasted, started off weakly and fell. Visa (-3%) and Mastercard (-2,7%), a leading global credit card company, has blocked several Russian financial institutions from their network. The result is that, already yesterday, it was virtually impossible to make a credit card payment in Moscow.
The Russian central bank on the other hand decided to hold Muscovite square closed for the second day in a row, but sales continue to hit the ruble which, after an attempt to recover, is down again.
The war in Ukraine, with unpredictable outcomes and developments, continues to keep European citizens in suspense and the markets in check, leading investors to favor traditional safe haven assets. In the first place, government bonds: the yield on the ten-year Bund returns negative, but the Italian BTP does even better and the spread shrinks; the prices of 10-year Treasuries rise, while the rate falls. Gold shines brighter and hovers around 1921 dollars an ounce.
The dollar, yen and Swiss franc rose on the foreign exchange market. The single currency is falling against the greenback in the 1,138 area.
Cryptocurrencies rise again, after the losses of the last eighth and it is suspected that this effervescence is due to the fact that Moscow and the oligarchs are trying, in this way, to circumvent the sanctions of the West. That would be seven Russian banks out of Swift. Meanwhile, it seems that Moscow is preparing a decree to stem the hemorrhage of foreign investments. Prime Minister Mikhail Michoustin has spoken of a draft to introduce temporary restrictions on the exit of foreign investors from Russian assets, in order to "allow companies to make informed decisions" and not under "political pressure".
Keep going up the price of raw materials from gas (+12%) to oil. Texan crude quickly exceeds $100 and is currently trading at around $104 a barrel, up about 9%. Yesterday, Canada decided to ban all imports of Russian oil, but so far it is the only state to have directly affected President Vladimir Putin's energy sector. Since the beginning of the year, the price of WTI oil has risen by around 33%. The performance is similar for Brent which moves above 105 dollars a barrel.
Europe in free fall
The European markets, which yesterday managed to limit the damage in the final, are not replicating the same pattern today. Financial stocks, the travel and leisure sector struggled after disappointing results from gambling group Flutte. They close against the trend defense titles such as the German ones, Rheinmetall, which manufactures tanks and armored personnel carriers and Hensoldt, which specializes in electronic sensors. Leonardo also did well +1,45%, in Milan.
Shell in London limits damages to 1,06%. The British major will abandon all of the group's operations in Russia, including a major liquefied natural gas plant.
The Reuters news weighs on the continental energy sector the company Nord Stream 2, based in Switzerland and which manages the gas pipeline of the same name which connects Russia to Germany bypassing Ukraine, is considering filing for insolvency.
The world's leading shipping company, Maersk, has announced it will suspend cargo shipments to and from Russia.
The Markit PMI for the manufacturing sector showed a slight slowdown in growth in the euro zone in February, although activity remains at high levels. Supply chains, already hit hard by the pandemic, appeared to have found some fluidity but are now facing further disruption as airspace closures inevitably also affect the transport of goods across the skies. Transportation between Europe and North Asian destinations such as Japan, South Korea and China has become problematic.
Piazza Affari below 25 thousand points
The losses in Piazza Affari dragged the Ftse Mib below the psychological threshold of 25 thousand basis points (24.363) to the lowest since July 2021.
The black jersey of the day belongs Moncler -9,12%, followed by Telecom, -9,05%, on the eve of the board meeting which will discuss the industrial plan which should lead to the unbundling of the network assets and to create the conditions for their integration with Open Fiber, while the non-binding offer from Kkr appears increasingly in the balance.
As service information, which has nothing to do with the thud of today's stock, it should be noted that, as expected, Adrian Calaza joined the group reporting directly to Pietro Labriola, Chief Executive Officer and General Manager, succeeding Giovanni Ronca in the position of chief financial officer.
Banks are still among the blue chips the worst starting from Mediobanca -7,83% and Intesa, -7,72%. Even Unicredit, after a failed rebound attempt, closed with a loss of 6,95%.
Bad the automotive with Pirelli -6,92% and Stellantis -6,93%, the latter despite the optimism of the strategic plan to 2030. It stands out on the securities of the Ftse Mib Eni, +3,04%, with the increases in crude oil.
Leonardo's favorable phase continues. Good for Terna +1,83%.
Spreads down, betting on the cautious ECB
The Italian secondary closes in a big way. The spread between 10-year BTPs and Bunds for the same duration, it fell by 149 basis points, with a drop of 7,31% compared to yesterday's closing.
The rate of the BTP drops to +1,42%, that of the Bund to -0,07%. During the session, the two-year Italian bond rate also returned negative.
Investors are betting that the Ukrainian crisis will slow the pace at which central banks cut back on their stimulus, despite the run-up to inflation.
At the end of the face to face with the German chancellor, Christine Lagarde, president of the ECB, tweeted: "Scholz and I had a good meeting. The ECB is implementing the sanctions decided by the EU. We will do what is necessary within our mandate to ensure financial and price stability. This will limit the implications of Russia's horrific war against Ukraine for the European economy."
Overseas they expect, tomorrow and Thursday, speeches by the Fed chairman to Congress, where he will present the usual six-monthly report on monetary policy; investors are hoping for new indications on the US central bank's next moves. According to experts, the Ukrainian crisis will convince the Fed to proceed only with an interest rate hike of 25 basis points in March, and not 50 basis points.
