The news from the front is dramatic, but the European markets are hoping for a negotiated exit from the conflict and are closing a stellar session after 14 days of passion lived to the syncopated rhythm of the Russia-Ukraine war.
The afternoon helped strengthen the rally the sounding start of Wall Street, back from four consecutive days down.
Piazza Affari gains 6,95% and goes up to 23.889 basis points, with banks and cars in orbit, while only oil stocks lose share. The finish is euphoric in Frankfurt +7,89% and Paris +7,13%. Amsterdam +4,81%, Madrid +4,71%, London +3,44% are tonic.
The script seems the opposite of the last few days: oil and gas decline; gold weakens; the euro rears its head against the dollar; cryptocurrencies are soaring; US and German government bonds are on balance and rates are rising.
Resuscitating this desire for equity is probably the belief that stock prices have fallen to the point that worth buying, but also the fact that the war is slowing down the path to normalization of the central banks' monetary policy, while it is hoped that tomorrow, in Turkey, the negotiations between the foreign ministers of the two countries will make progress. Today however, unfortunately, there is news of a Russian bombing of Mariupol which destroyed (probably by mistake) a pediatric hospital and killed children. A fact that will hardly remain without consequences.
Cars and banks rally in Piazza Affari
In Piazza Affari, the banks, the auto sector and the technological companies show a great recovery.
Unicredit leads the sector with a gain of 11,68%. The bank confirmed the dividend, despite its exposure to Russia which, according to analysts, is still lower than initially feared.
In the slipstream they close with a bang Entente +11,09% and Bper +9,99%. Assets managed in cash with Finecobank +11,87% and Banca Mediolanum +10,96%.
The car's engines roar: Stellantis +12,28% it's the blue-chip that rallied the most today. Exor +11,03% and Pirelli +10,38% close not far away.
Stm appreciates, +10,39% following the presentation of new products by the customer Apple (in progress in New York), including the new iPhone SE, an economic model of its smartphone.
Le profit-taking weighs only on oil stocks: Tenaris -5,53%; Saipem -1,44%; Eni -0,5%.
Oil down despite the US embargo
Oil greets the US embargo on Russian energy products with a cut. Therefore, despite the sanctions decided by Washington, which cannot be shared by the EU given the countries' great dependence on Russian gas, Brent loses about 5% and trades around 121 dollars a barrel; the WTI retreats by a similar percentage to the $117 area.
The words of the director of the International Energy Agency contribute to weigh on prices, according to which the 60 million barrels of oil reserves put in place to compensate for supply interruptions are only "an initial response" and, there there will be other similar measures in case of need.
Yes it weakens gold, currently below $2000. Spot gold trades down 2,7%, around 1993,70 dollars an ounce. Palladium, platinum and silver also declined.
Reverse dollar
The dollar deflates against the major currencies: the greenback index is currently down by more than 1%. This is how the euro wakes up which trades in progress of about 1,5% and brings its "price" back to 1,1073 dollars.
Providing some fuel to the single currency is the (as yet unconfirmed) possibility of one joint issuance of bonds by the EU to finance energy and defense expenditures.
Cryptocurrencies are rallying. Bitcoin is up more than 10% and is worth over $42.400. Invigorating digital currencies is the White House's plan for a digital dollar and a new government strategy towards the sector.
The spread falls, yields on Bunds and T-Bonds rise
Risk appetite drives investors away from safe investments like Bunds. In fact, the yield on the ten-year German benchmark rose to +0,19%. The 10-year BTP closes at +1,6% and the spread drops by 5,47 to 142 points.
Overseas the prices of T-Bonds fall and yields rise. The 1,922-year Treasury is currently trading at a yield of 2,7%, up XNUMX% from yesterday's close.
Meanwhile they approach central bank decisions. Tomorrow it's the ECB's turn, from which no surprises are expected, given the new geopolitical framework that accentuates fears of stagflation.
From next week's meeting of the FOMC – the monetary policy arm of the Fed – interest rates are expected to rise by 25 basis points. Fed Chairman Jerome Powell recently reiterated that the central bank will act "carefully" on monetary tightening.
