Rates on the rise and growth at a standstill, while Covid puts the services sector in China under pressure: the combination of these elements, in a context of war in Europe (which seems destined to last for a long time, according to NATO), depresses continental markets that closed sharply lower, sunk in the afternoon by the negative opening of Wall Street.
Business Square it is among the worst and loses 2,05%, falling to 24.447 basis points, with almost the entire main list in the red. While waiting for the elections, the Cac 40 is depressed more Paris, -2,21%; they are strongly negative Amsterdam -2,22%; Frankfurt -1,93%; Madrid -1,58%. The best is London, which limits losses to 0,33%.
In addition, the sales of government bonds continue, with yields rising. In terms of currency, the euro trades weakly against the dollar, in the 1,09 area, while the ruble is recovering. Raw materials are down (Brent -2,64%, 103,82 dollars a barrel), with the exception of natural gas, which is up sharply.
Stock markets in sharp fall: the index of fear soars
Wall Street started down, especially with the Nasdaq -2,3%, while the fear or volatility index (Vix, 24,4 +16%) is running, waiting for the Fed to publish the minutes of the last meeting tonight (in which it raised rates by 25 basis points). In a note to clients, quoted by Reuters, Unicredit said the minutes will be important for two main reasons: they could provide clues about the likelihood of a 50 basis point increase; they will help understand what the committee expects to move towards a faster pace of increases. A certain suspense was also created by the hawkish statements, seen yesterday, by Vice President Lael Brainard, considered by most to be a dove. In particular, for Brainard a reduction of the Fed's balance sheet could begin as early as next month, at a much faster pace than previous efforts. Experts fear that the Fed's action and a 50 basis point rate hike at the end of the next three meetings could cause a slowdown in the economy and Deutsche Bank for the first time yesterday spoke openly of a recession in 2023.
All while maintaining the inversion of the US bond yield curve between 5 and 10 years and between 5 and 30 years. Today sales continue and 2019-year rates rise, which has been at the top since 2,6 at over +3% (up by around XNUMX% since yesterday's close).
Rising spreads and declining GDP in Italy
Tensions on bonds are also registered in Europe, where the ECB has always been very cautious in its statements, but where theinflation runs and the slowdown in the economy is starting to make itself felt and could worsen with the implementation of the new sanctions aimed at stopping Russia in Ukraine. In particular, according to the draft of the Italian Def, anticipated by Reuters, the country's GDP should fall in the first quarter of the year and then recover in the following three months. Growth for the full year of 2022 is seen at 3,1%, down from the 4,7% indicated last fall. On the other hand, the deficit/GDP target of 5,6% is confirmed.
The climate does not favor the tricolor paper, which is losing share even today. The spread between the Italian and German 168-year bond, it rises to 2,84 basis points (+2,32%), with a rate of the BTP at +0,64% and that of the Bund at +XNUMX%.
Piazza Affari in red, but Avio goes into orbit
The best title in Milan today is Avio (+13,58%), an aerospace company listed on the Star segment, driven by the news of the maxi contract with Amazon from Arianspace, to which it will supply engines for the Ariane 6 launcher, which will put satellites into orbit for the broadband of the Kuiper project. This is the largest deal to date signed by the consortium that markets European launches. Amazon's project aims to "connect the unconnected", providing high-speed, low-latency broadband to communities around the world and connecting homes, schools, hospitals, businesses, governments and institutions.
In the main basket, however, the number one is Atlantia which, with a final spurt, closes up by 2,45%. The other positive titles on the list are more tepid, mostly utilities together with Unipol (+0,71%). So they appreciate each other Italgas + 2,02% Snam + 1,86% Ivy + 1,03% A2a + 0,03%.
The list of losses starts from Interpump -5,69%, under pressure for a few days. Bad the car with Pirelli, -5,41%, Cnh -5,04% and stellantis -4,45%.
Financial sufferers nexi -5,33%. The big names go down among the banks Understanding -2,93% and Unicredit -2,25%. The institute led by Andrea Orcel, responding to shareholders ahead of Friday's meeting, writes that the bank is "completing an urgent internal assessment of the impact, implications and consequences of an exit from Russia". However, he specifies that "it is not possible to draw conclusions overnight, but we will provide more details soon".
