The intoning start of Wall Street encouraged the European price lists for a few hours, but the umpteenth flame of gas, which reached 317 euros per Mwh in the session, clipped the wings of any flight of fancy. The closure in the continent is contrasted after a trend without compass.
Indeed, it is difficult to imagine inflation under control and an economy dazzling with i energy costs galloping in this way and central banks en route to monetary tightening. We will see what the bankers meeting today for three days in Jackson Hole have to say on the hot topics of the period and on their next moves and in particular Jerome Powell Fed chairman, who will speak tomorrow.
European price lists without compass
Square Business closed up 0,1%, at 22.454 basis points, showing itself to be more cautious than Amsterdam + 0,62% Frankfurt +0,39% and London +0,11%. But better than Paris -0,08% and Madrid -0,15%.
The higher-than-expected growth of German GDP in the second quarter, +0,1%, contributed to instilling a small dose of optimism in the morning, but on the other side of the balance, the dark mood of German companies revealed by the 'ifo index in August.
Overseas Wall Street is moving in fractional progress, especially with technology stocks. The macro data encouraged purchases: the stars and stripes GDP in the second quarter was, in the second reading, less worse, -0,6% (against a first reading of -0,9%); the inflation figure remained stable (+7,1%).
Requests in the week ending August 20th for i unemployment benefits they turned out to be lower than estimated (243 thousand against expectations of 255 thousand).
ECB: the fall of the euro increases inflationary pressures
The minutes of the July meeting of the ECB were published today, in which the first rate increase in over ten years was decided, by 50 basis points, even if some members of the board would have liked to limit themselves to 25 points. During the discussion it was noted that the signs of economic downturn could extend to 2023 and that the depreciation of the euro it represents a major change in the external environment and entails higher inflationary pressures for the bloc, given the higher costs of energy imports billed in dollars.
On the currency market the exchange euro Dollar it is not particularly affected by these considerations and the single currency continues to trade under parity against the US currency.
According to Reuters, money markets are expecting ECB rate hikes by 100 basis points by October: another 50 basis point hike would be fully expected in September, but there would also be a small probability of a 75 basis point hike.
Gas still rallying
Observed special for the destinies of the continent, but not only, is the gas, with futures prices in Amsterdam continuing to move above 300 euros. After a foray to 317 euros, prices then began to fall while remaining at dizzying levels, in the midst of the worst supply crisis in decades which is putting governments under pressure.
The price is stable Petroleum, after the surge due to fears about supply, Brent is trading at around 100,30 dollars a barrel.
The spread is down, but it is a record for the two-year bond
These all seem to be premises that should lead to an increase in the spread. However, in this period, the pressures are on all government bonds and not only on those of Italy or the euro area. Again Reuters writes that yields on UK two-year bonds have reached their highest level since the 2008 crisis and that the 2-10 year yield curve has been more inverted than ever since then.
Today, on the secondary side, the ten-year BTP rate falls to 3,55% and since it falls more than the Bund of the same duration, which stops at +1,31%, the spread narrows to 223 basis points (-3,62%).
This despite the site of the Financial Times highlights the bearish bet of hedge funds against Italy, in a re-edition for now that is less serious than what we saw 14 years ago. The total value of Italian bonds borrowed by investors to bet on a fall in prices would have reached the highest level from January 2008 to August, it is more than 39 billion euros, according to data from S&P Global Market Intelligence. Italy "is the most exposed country in terms of what happens to gas prices and the politics are challenging," Mark Dowding, chief investment officer of BlueBay Asset Management, which manages about $106 billion of assets.
On the primary, meanwhile, the two-year Italian bond yield has reached a new record since this deadline (2021): the gross yield on BTPs at 30 May 2024 assigned by the Treasury at auction reached 1,86%, up 16 basis points compared to the last month. The amount requested was equal to 4,452 billion, for a coverage ratio of 1,78.
Piazza Affari towed by Eni
He contributed to giving some energy to Piazza Affari Eni, +2,06%, best blue chip of the day also thanks to the continuous development of its businesses. Yesterday the leaders of the six-legged dog met the president of the National Oil Corporation of Libya to launch a new phase of investments in the country and increase gas production in that area. According to Banca Akros analysts, this is good news, as Libya accounted for around 10% of the company's total output last year.
The oil sector is, moreover, tonic in Europe and stands out in Milan also with Tenaris +1,84%. The red though is deep for Saipem, -4,63% subject to greater volatility.
Among the titles in progress in the automotive sector Exor +1,78% and Cnh +1,74% (bad instead Iveco). Well stm +1,64%, which looks at the event announced by Apple Lossless Audio CODEC (ALAC), (+0,9% in New York) for September 7, in which the Cupertino-based company will probably launch theiPhone 14, the Apple Watch Series 8 and an iOS operating system update.
Banks and other financial stocks record a down session: nexi -2,49% Bpm bank -2,49% Finecobank -1,88% Unicredit -1,59%.
