And the day of the ECB came. At 12.15 the central bank board will announce to the markets the rate decision. The increase is taken for granted, the dimensions uncertain: most expect 75 points, but it is not excluded that in the end the softer thesis will prevail, ie only 50 points in homage to the principle of gradualness. Whatever happens today, is the comment of Morgan Stanley, rates will have to settle around 2 percent by March. Or even more. Much will depend on the outcome of the very tough energy confrontation with Russia, ie on the effectiveness of energy savings plan which Brussels is about to launch tomorrow, Friday 9 September. Even earlier in the US Jerome Powell will anticipate the criteria of the Cato Institute upcoming Fed decisions: even if we see the first fruits of the war on inflation, confirmed by the Beige Book, the central bank does not intend to let its guard down. And so Wall Street is resigned to a new increase of 75 points for the end of September. But it is already looking ahead: the economy is holding up, the price of oil is falling and, after the sharp rises in yields, the bond fever is curbing. In summary, autumn will be very tough in Europe, less so overseas. And positive signs are also coming from Asia.
Slow down Shanghai. Covid stops the Chinese i Mac factory
- This morning the Tokyo Stock Exchange soars +2% on the wave of better than expected data from the economy which grew by 3,5% in the second quarter (against the +2,9% expected).
- However, i remain China's problems, paralyzed by the zero Covid strategy. . The Beijing authorities have extended the lockdown in Chengdu, a megalopolis of 21 million inhabitants where 116 positive people were found yesterday. For the first time, the main plant that produces iPads and iMacs on behalf of Apple is hit, a novelty that risks slowing down winter sales of the Mila which yesterday presented the new Apple Watch 8, AirPods and iPhone models 14
- Hong Kong's Hang Seng loses 0,3%. CSI 300 of the Shanghai and Shenzen price lists on parity.
- Bloomberg reports that the Biden administration has decided to stall for the elimination of tariffs on China, in recent weeks there were rumors of exemptions and measures capable of easing the impact on consumption and employment.
The Nasdaq rebounds, the yields of the T bond are slowing down
- After a long negative streak, the US Stock Exchanges have reacted. The broad drop in oil and bond yields yesterday brought Wall Street back: the Nasdaq closed up more than 2%, the first session with a plus sign after a series of seven negatives. S&P500+1,8%. Overall, it was the best session for Wall Street's benchmark stock indices since early August.
- The 3,22-year Treasury Notes traded at 3,35% this morning, up from 3,42% yesterday. The two-year period rises to XNUMX%. Real rates are on hold, because inflation expectations have fallen more or less in line with nominal rates. But the Fed's action does not stop: Powell's deputy, Lael Brainard, reiterated that the rate hike will continue as long as it is needed, in order to stop a high cost of living that hurts the lowest incomes above all.
- Goldman Sachs raised its forecast of the Fed's next rate hike to 75 basis points, 25 basis points more than the previous indication. On 21 September, the Federal Open Market Committee is expected to bring key rates to 2,75%-3%. For November, the investment bank expects +50 basis points, double the previous forecast.
Positive start for the Stock Exchanges, Btp at 3,84%
- Futures signal a positive start to the European session; Eurostoxx +0,5%
- European stock markets closed slightly higher pending the Frankfurt decisions. While awaiting the far from obvious outcome of the comparison on the energy saving plan, the Stoxx Utilities index gained 2,3%. The Stoxx Energy index loses 3%.
- Bund futures edged up slightly to 147,8. The ten-year bond closed at a yield of 1,57%. The ten-year BTP slows down to 3,84%.
- On the day of the announcement of the monetary policy decision by the ECB, the euro-dollar cross is slightly below parity at 0,999, +1% yesterday. Gabriel Debach, market analyst at eToro writes that the rise "could be supportive for the single currency" even if some doubts remain about the effectiveness of the tightening, given that inflation, in Europe, "only 15% is generated by question, compared to 30% in the United States. It will certainly increase the risks of recession, which are already high in Europe, but it will allow us to take advantage of any supportive policies or rate cuts".
Sickness in China for oil, gas below 200 euros
- WTI oil, also penalized by news from China on the pandemic, closed down almost 6%, this morning it climbed weakly to 82,5 dollars a barrel. Brent at $88. Quotes on the lows since the beginning of the year.
- Gas at the Dutch node closed yesterday down 10% at 212 euros per MWh. EU gas opens this morning at -8% below 200 euros.
- The European Commission will propose to set a limit on the price of electricity produced without gas, at 200 euros per MWh. The one-year electricity future trades around 530 euro MWh. The Commission itself is working on a recovery plan for the extra profits accumulated by electricity producers that do not use methane as fuel. The new cap, which concerns wind, sun, coal and nuclear power, would be set at a much higher level than Italy's current level for renewables, equal to 65 euro MWh.
Piazza Affari: Leonardo and Unipol in evidence. Stm records
- The CEO of Stm, Jean-Marc Chery confirmed the "ambition" of becoming a group with 20 billion dollars in revenues in the medium term. The CFO, Lorenzo Grandi, has forecast a gross margin of 47% for 2022, “perhaps even a little better. For next year I think we will be on the same level”.
- Leonardo: SocGen strengthens the Buy and adjusts the target from 12,5 to 12,7 euros.
- Unipol: Barclays adjusts the target from 6,5 to 6,6 eu and strengthens the Overweigh opinion.
