The unexpected caution of the Federal Reserve on the descent of the interest rates and its increased focus on the level of inflation rather than, as in the past, on employment, has rekindled the volatility has brought down the actions and make the skyrocket dollar. This morning in Pacific Asia the decline prevails, but the negative variations are modest. Bank of Japan left monetary policy unchanged. Noteworthy is the unexpected collapse of the GDP of New Zealand which thus falls into the worst recession since 1991. Today will also see the meetings of the central banks in Norway, Sweden and the United KingdomEuropean stocks are seen opening lower.
Powell still not satisfied with inflation level, less concerned about jobs
Yesterday there Federal Reserve closed 2024 with the expected third consecutive rate cut of interest and with an unexpected inflation warning. President Jerome Powell he said it clearly: the projections on consumer pricesor the central bank's end-of-year forecasts fell slightly: FOMC members expect it will take much longer for inflation to reach the 2% target, which has not been seen in nearly four years. As a result, they scaled down cut expectations rate hikes for next year and Powell made clear that any adjustment would depend on further progress in cooling price increases. The increased focus on inflation represents a significant change of strategy than in September, when officials saw a weaker labor market as the greatest risk, analysts said. But the latest data has reignited concerns that inflation could stall above the central bank’s 2% target, as have President-elect Donald Trump’s policy proposals. “When we look at further cuts, we’ll look for progress on inflation,” Powell said at a news conference on Thursday. Forecasts now call for just a half-percentage point of cuts next year, half the amount forecast in September.
Wall Street in sharp decline: from Tesla to Amazon to Intel
A decidedly negative session for the US stock market yesterday after Powell's words on the next, very cautious, rate cuts in 2025. Dow Jones dropped 2,58%, continuing the downward trend represented by ten consecutive drops, which began on December 5. Similarly, sales hit theS&P-500, which closed the day at 5.872 points, down 2,95%, the worst daily change since the end of 2021. The Nasdaq 100 (-3,6%) and the S&P 100 is terrible at -2,93%.
Strong nervousness and widespread losses in all sectors of the S&P 500. Among the worst performers in the S&P 500 basket, the consumer secondary sectors (-4,74%), telecommunications (-3,16%) and financials (-3,03%) fell the most. The only Dow Jones Blue Chip to report a significant increase is United Health (+2,92%). worst performances they registered on Intel, which closed at -5,72%. Negative session for Amazon, which falls by 4,60%. Significant losses for American Express, down 4,50%. In apnea Goldman Sachs, which falls by 4,25%.
All technology stocks in the Nasdaq 100 suffered a mixed decline. The worst performances were recorded on tesla motors, which closed at -8,13%. Zscaler crashes, showing a fall of 7,36%. Letter on Atlassian, which records a significant drop of 7,26%. CrowdStrike Holdings falls, with a decline of 7,24%. Today, the US quarterly GDP is expected at 14:30 PM (expected 2,8%; previous 3%).
Donald Trump rejected the bipartisan agreement reached by congressional leaders to avoid a partial government shutdown this weekend, urging lawmakers to scrap the deal and pass a leaner, less onerous bill. His threatening posts have undermined efforts to pass a provisional spending bill to keep the government funded through mid-March, while providing more than $100 billion in disaster and farm aid. Trump said Congress should craft a new deal that keeps the aid but leaves out other measures, and pair it with an immediate increase in the federal debt ceiling, before the debt limit expires next year.
Japan rates hold, yen and Asian currencies fall, markets mixed
The Hang Seng of Hong Kong loses 0,8%: the city's special statute Monetary Authority, a body comparable to the central bank, has lowered rates by a quarter of a point to 4,75%, the lowest since 2022. The CSI 300 index of stock markets Shanghai and Shenzhen is slightly higher. The People's Bank of China has stepped in to shore up the currency, which is under pressure, like all the others on the planet, after the Federal Reserve's decision. The yuan weakens to 7,29, the seventh session of appreciation of the cross.
The Nikkei index of Tokyo loses 0,5% and the yen weakens to 155,3, the lowest in the last three weeks. Bank of Japan has kept its settings stable monetary policy and bides its time to normalize monetary policy. The board led by Governor Kazuo Ueda left the benchmark rate at around 0,25%, an outcome expected by more than half of economists surveyed by Bloomberg. Board member Naoki Tamura voted against the decision, proposing a rate hike to 0,5% to counter rising upside risks to inflation. It was the first time since Ueda took over as governor that a dissenter has emerged. The central bank indicated that the economy is moving in line with expectations, a prerequisite for a rate hike, reiterating that the inflation trend appears to be consistent with its target for the second half of the forecast period. Ueda is biding his time for a third rate hike, while recent economic indicators show inflation is moving in line with the BOJ’s projections.
Stock markets closed lower of Australia (-1,7%) and of Taiwan (-1%). The stock market is falling South Korea, KOSPI index -1,8%. The won falls to its lowest level since 2009 against the dollar. BSE Sensex index of Mumbai, -1,2% and the Indian Rupee fell below 85 against the US dollar for the first time.
New Zealand: GDP surprisingly falls by 1,0%. It is the worst recession since 1991
The economy of New Zealand has sunk into recession in the third quarter, since the activity it collapsed much more rapidly than expected and the production of the previous quarter was cut, a disastrous result that strengthens the need for more aggressive rate cuts. The shocking news pushed the local dollar to a fresh two-year low of $0,5614, after already losing 2,2% following monetary easing by the US Federal Reserve. Markets added to bets that the Reserve Bank of New Zealand will cut rates further, following its 125 basis point cut to 4,25%. Swaps now implied a 70% chance of a 50 basis point cut in February and rates were expected to fall to 3,0% by the end of 2025. Data today showed that the gross domestic product è dropped by 1,0% in the September quarter compared to the previous quarter, far exceeding market expectations for a limited contraction of 0,2%. The June quarter was revised to -1,1%, and two consecutive quarters of decline is the technical definition of recession. Aside from the pandemic, this was the biggest two-quarter decline since the deep recession of 1991.
European stock markets: central banks of Norway, Sweden and the United Kingdom meet
Le European stock exchanges are seen opening sharply lower based on the -1,55% of the Eurostoxx50 future. Yesterday the FTSEMIB in Milan closed up 0,25%. The ten-year Bund at 2,24%, ten-year BTP 3,40%. The dollar strengthens against the euro at 1,038.
Central bank meetings will also be held today in Norway, Sweden and the United Kingdom.
La Norwegian Central Bank, Unlike other Western central banks, it will likely keep interest rates at their highest level since 2008, supported by economic growth, above-target inflation and a weak local currency. According to a Reuters poll of economists, the Swedish central bank will likely cut its benchmark interest rate by a quarter of a point, with further monetary easing expected early next year if inflation remains under control. Finally, after warm wage data in UK At the start of the week, markets are expecting the Bank of England to leave the Fixed rates at 4,75%. Fifty basis points of cuts have been priced through 2025, with the first 25bp cut priced in full for May.
Germany. Consumer sentiment is expected to improve slightly at the start of the new year. For January 2025, it is expected to increase by 1,8 points to -21,3 points compared to the previous month (revised -23,1 points), against market expectations of -22,6 points. This is shown by the latest results of the GfK Consumer Climate powered by NIM, published jointly by GfK and the Nuremberg Institute for Market Decisions (NIM).
TIM. The Ministry of Economy and Finance (MEF) together with Retelit (controlled by Asterion) has submitted a binding offer to Telecom Italia to acquire the entire capital of Sparkle. The offer is equal to 700 million euros in total and is valid until January 27, 2025.
Saipem, in consortium with KOA Oil & Gas and AVEON Offshore, has been awarded a new offshore contract by Shell Nigeria Exploration and Production Company Limited (SNEPCo) for the Bonga North project, relating to the development of a deep-water oil field, 130 km off the coast of Nigeria. The overall value of the contract is approximately $1 billion and Saipem's share amounts to approximately $900 million.
Stellantis. The Enrollment page European car sales fell again in November after a pause in October, driven by sharp declines in France (-12,7%) and Italy (-10,8%), while the German market was little changed (-0,5%). In the EU, EFTA countries and Great Britain, registrations fell 2% on the year to 1.055.319 vehicles, according to data from Acea. Stellantis recorded a 10,8% drop in registrations in November, with a market share of 13,5% from 14,4% in October. Chairman John Elkann will be heard by the competent parliamentary committees to illustrate the situation of the automotive group, as requested by Parliament. The company expects car production in Italy to increase by around 50% in 2026, after a “very tough” 2025 in which it will have to continue with redundancy payments, said the head of European operations Jean Philippe Imparato to transmission Rai 'Five minutes'.
Enel. One of its subsidiaries and the Czech company Eph have signed an agreement through which Eph will acquire from Enel Produzione 50% of Slovak Power Holding, owner of 66% of Slovenské elektrárne, which owns hydroelectric and nuclear power sites. The transaction will have a neutral effect on Enel's net debt and a negative impact on reported net profit of approximately 585 million euros. Among other things, the group's board of directors has authorized the issuance, by December 31, 2025, of one or more non-convertible bonds, in the form of hybrid subordinated securities, including perpetual ones, for a maximum total amount of 2 billion euros, to be placed exclusively with institutional investors, both European and non-European, including through private placements.
UniCredit The German government said it was committed to finding a solution for Commerzbank and rejected the “uncoordinated and unfriendly approach” of UniCredit, which increased its stake in the bank.
Banco BPM Il Sole 24 Ore writes that in UniCredit's plans the takeover bid for Banco Bpm, if there are no hitches, should be successful within the first half of 2025.
Terna has subscribed two credit lines linked to ESG indicators for a total amount of 250 million euros.
nexi . Fitch raised its Long-Term Issuer Default (Idr) and senior unsecured ratings to 'BBB-' from 'BB+'. The outlook is stable.
