The euro remains around parity against the dollar, oil collapses, Wall Street is little moved and the European stock exchanges file contrasted a session without compass. To find the route, they are waiting to see how US inflation is going, in order to better predict future moves by central banks. The key appointments are those on consumer and producer prices in June (to be released starting tomorrow in the United States) and the start of the quarterly season for large US banks.
Mixed Europe: Piazza Affari in red with Madrid
In an economic and geopolitical context full of unknowns and with the Italian government grappling with the convulsions of its majority, Piazza Affari loses 0,38% (21.485 points), penalized by thud of Saipem, -48,56% and from sales of the securities of the big banks. The credit sector is also ballast Madrid, -0,6%, where Prime Minister Pedro Sanchez announced temporary taxes on electricity companies and banks, to generate revenues of around seven billion in 2023-2024 and help Spaniards defend against soaring energy prices and of inflation.
Closing is positive for Paris + 0,45% London +0,14% and Amsterdam +0,23%. Mashed potato Frankfurt it appreciates by 0,5%, despite the fact that German investor morale is on the wane. In July, reports the research institute Zew, the confidence index passes to -53,8 from -28 in June, due to worries about gas, the Chinese lockdowns and the rise in interest rates by of the ECB.
Euro around parity with the dollar
Teutonic pessimism fell for a few moments on theeuro, which in correspondence with the data release fell below parity against the dollar, and then perked up. At the moment the single currency is trading slightly higher at around 1,006.
The weakness of the euro would derive from the two different attitudes of the central banks, the more aggressive that of the Fed and the more cautious that of the ECB, which also registers internal disagreements.
For Nomura, central banks will cut rates in 2023
Speaking of monetary policies, Nomura meanwhile throws his heart beyond the obstacle and predicts that the main central banks (Fed, ECB, BoE) will begin to cut interest rates in 2023 with inflation easing and the expected recession continuing, while peak rates should be reached this year.
According to the Japanese giant the Fed will suspend hikes until core inflation slows to 2-2,5% a year, then cuts rates by 25 basis points per meeting starting September 2023. At which point the budget run-off will also end to avoid that the monetary policy instruments conflict with each other.
For the ECB expects six rate hikes for a total increase of 175 basis points by March 2023. However, as the expected recession continues, it expects a 25 basis point rate cut in June.
If Germany is completely cut off from Russian gas, the ECB's monetary policy tightening could end sooner than expected.
For the Bank of England, Nomura estimates another 100 basis points of rate hikes by the end of 2022. The recession and slowing inflation will make rate cuts of 25 basis points likely in May and June 2023.
Strong oil sales
Another important element of the day are the heavy selling on oil futures. Brent loses 6,2% and is approaching one hundred dollars a barrel; US crude dropped by a higher percentage, -7%, and traded at around 96,60 dollars a barrel.
The collapse comes with OPEC which forecasts one for next year growing global demand, but at a slightly slower pace than 2022. Meanwhile, Joe Biden is leaving for the Middle East, where he will stop in Saudi Arabia and talk about energy security.
Piazza Affari defends itself with Leonardo
Piazza Affari limits the day's losses in the first place with Leonardo +3,2%, which celebrates the promotion by Moody's which improved the outlook on the stock's rating to 'positive' from 'stable', confirming the valuation at the Ba1 level.
Inwit +1,58% and Nexi +1,6% closed a positive session. The Agnelli galaxy is recovering with Iveco +1,67% e asset management bounces back with Banca Mediolanum +1,5%; Banca Generali +1,57%; Azimuth +1,55%; Fineco +1,22%.
The black jersey goes to Saipem, after a start in volatility and sight the closure of the capital increase of 2 billion euro, 70% subscribed. Today and tomorrow the unexercised option rights are being offered on the Stock Exchange, for a value of around 0,6 billion euro. Eni (-0,55%) and Cdp subscribed the new shares in proportion to their shareholdings, totaling approximately 44% of the capital increase. The communication on the definitive outcome of the capital increase will be provided by the market opening on July 15th.
Red is also on for Amplifon -6,99%, Diasorin -4,51%, Telecom -3,27%.
The mood is bad for the banks, on which Morgan Stanley cut the target price: Banco Bpm -2,48%, Bper -2,46%, Unicredit -1,97%, Intesa -1,41%. Outside the main basket, MPS loses 3,11%.
In other sectors Landi Renzo sinks by 13,38% after the approval of the terms and conditions of the almost 60 million capital increase.
È little move Autogrill, -0,32%, after the losses of the day before which brought it close to Dufry bid price.
Brunello Cucinelli salt, +2,64%, on the day of the quarterly report. Jefferies cut the target price to 50 from 58 euros taking into account the prospects of the sector but raised the medium-term estimates thanks to the unique positioning of the "relaxed" ultra-luxury brand.
Stable spread, declining yields at auction
The spread on the secondary rises slightly, but the yields of the annual Bots (for seven billion) dropped this morning at auction, driven by a huge request. The yield falls to 0,722%, minus 17 basis points compared to the previous auction.
On the secondary side, the yield differential between 10-year BTPs and Bunds of equal duration is 203 basis points (+0,57%), but the rates fell respectively to +3,1% and +1,08%.
