The European indices limited their losses in the afternoon, influenced by the cautiously positive start of Wall Street, after the red on the eve. At the moment, however, the American indices are down again.
Business Square stems the damage to 0,82% and slips to 26.966 points, thanks above all to the leap of Banco Bpm, +9,8%, driven by press rumors about a possible move by Unicredit (-1,01%) over the weekend. Paris is in the dark and loses 1,27%, with luxury stocks such as Hermes and Luxottica in sharp decline. State-controlled French power company Edf also lost nearly 2% after it cut its 2023 estimates of nuclear generation in France from 340-370 TWh to 300-330 TWh.
In the rest of Europe: Frankfurt -0,44%; Madrid -0,98%; Amsterdam -0,15%; London -0,06%.
Prices were influenced by the sell-off that took place yesterday on the American stock market following the jump in inflation in January, +7,5% on an annual basis, a rate higher than expected, which has not been seen for 40 years and which puts the Fed in a corner on rates.
In bonds, the prices of T-Bonds today appear to have risen slightly, but the yield on the 2-year Treasury is moving over XNUMX%.
In a context of central banks oriented towards more restrictive policies (despite the water on the fire thrown by the president of the ECB Christine Lagarde) the Italian secondary sector suffers. The spread between ten-year BTPs and Bunds, it rose 162 basis points (+3,4%), with yields at +1,88% and +0,26%.
On the currency side, the euro traded slightly against the dollar, but remained close to 1,14.
Among the raw materials, the Petroleum, which travels above 90 dollars: Brent +1,25%, at 92,56 dollars a barrel; Wti +1,32%, $91,07.
Piazza Affari: spotlights on the banks
The story of the day for Piazza Affari is the one concerning Banco Bpm and Unicredit, following rumors about a possible takeover bid by the bank led by Andrea Orcel, perhaps even over the weekend. The protagonists do not support the hypothesis: a spokesman for Unicredit maintains that the bank "continues to evaluate all the strategic options available and will not fail to keep the market informed of any concrete development". At the moment no extraordinary meeting of the board of directors has been convened.
Despite the tepid reaction of the interested parties, Anima Holding, a subsidiary of Banco Bpm, also recorded an increase of 5,52%.
The resumption of the discourse on banking risk also invigorates Bper, +1,53%, while the shareholder of the latter, Unipol closed with little movement (-0,63%) after the presentation of the accounts. Unipolsai is up (+0,84%).
Among the banks it is in sharp decline Understanding, -2,28%, while outside the main basket Banca Intermobiliare (+30,89%) and Mps (+7,62%) closed with a bang. The first thus approaches the price of the takeover bid launched by the shareholder Trinity Investments on the 12,51% of the capital it does not yet own. While on Monte Paschi the minister Daniele Franco says that “it is important that it becomes more solid and continues to develop having in mind a future that could be a partnership. It is absolutely important that it consolidates and maintains its roots and a brand that is that of the oldest European bank".
Oil stocks close higher: Eni + 1,73% Tenaris +1,04% and Saipem +0,3%, the latter after the heavy sales which hit it starting from 31 January.
The markdowns are heavy for Iveco -3,8% Pirelli -3,34% Moncler -2,9%. Banca Mediolanum it dropped 3,39%, despite the Buy of Equita, after a quarterly above expectations released by the company yesterday evening.
Draghi: risks from energy, inflation, Ukraine
In a context of uncertainty for equities and bonds, "the increase in the spread does not only concern Italy, which has seen the spread grow less than other countries". This was underlined by Prime Minister Mario Draghi, in the press conference at the end of the CDM which launched a historic one justice reform.
“This must not hide – says the prime minister – that we are starting from a much higher spread base and a much higher volume of public debt. We need to spend well, watch over the accounts, watch over the debt”. Draghi rules out his involvement in politics at the end of the legislature, but concedes himself on economic issues. “Tomorrow – adds the governor of the Bank of Italy”, Ignazio Visco, “in his annual Forex speech he will announce some very good numbers on the growth of the public debt, we will have to continue to keep these numbers”.
However, Italian economic growth slowed down during the first quarter and there are risks on the horizon that could affect the outlook for the entire year.
“For this year, the EU Commission forecasts growth of 4,1% for Italy, higher than France and Germany. The risks are given by the price of energy, inflation and geopolitical tensions that may arise”. “The Government is reflecting on interventions in these areas, the important thing is to maintain growth, which allows us to face the high debt-to-GDP ratio, to face the markets with confidence and calm. This is the most important thing and the government is fully committed ”.
The president of also spoke today on the subject of inflation Generali (-0,16%), Gabriele Galateri, at the Politico Finance Summit 2022, in Paris. For Galateri “Inflation is the only worrying element. We have the resources from Europe, we have customers with excess savings for the consumer market and the pandemic which is becoming endemic. We need to be careful and use resources towards absolutely essential objectives: competitiveness, productivity, innovation”.
US rates: Goldman Sachs estimates 7 rises
After the jump in consumer prices seen yesterday in the US, Goldman Sachs expects seven interest rate hikes by the Federal Reserve of 25 basis points each for this year, more than the five previously estimated. But other analysts are also adjusting their forecasts. Ryan Wang, an economist at HSBC, estimates a hike of 50 basis points in March and another four increases by a quarter of a point in 2022. In this way, the target range of fed funds will move from 0-0,25% to 1,50, 1,75-XNUMX%.
Deutsche Bank expects a 50 basis point hike in March and five more 25 basis points for 2022, with hikes at every Fed meeting except November, for a total of 175 basis points in 2022. Deutsche economists they also warn that there is a growing risk of a recession in 2023 or 2024.
Meanwhile, the president of the Federal Reserve In St. Louis, James Bullard, a member with voting rights on monetary policy at the central bank, tells Bloomberg News he is in favor of raising interest rates by 50 basis points in March and a full percentage point by beginning of July. Finally, US President Joe Biden believes there will be a “substantial reduction in inflation by the end of the year”. But "it is appropriate" for the Fed to "recalibrate support" for the stars and stripes economy.
On the European front, the tone is different Christine Lagarde. The president of the ECB, in an interview with Redaktionsnetzwerk Deutschland, says that raising the main interest rate now would not reduce the euro zone's record inflation and would only damage the economy.
Finally, the winds of war on the Ukrainian front do not subside: Russia is allegedly amassing even more troops and an invasion could arrive at any moment, says US Secretary of State Antony Blinken.
