The Delta variant does not let go, the central banks are starting to move towards less expansive policies and the macro data are raising doubts: on the eve of the speech by the Fed's number one, Jerome Powell, at the Jackson Hole virtual symposium, which begins today, from selling on the other side of the Atlantic on the markets in a climate of uncertainty, while the geopolitical situation is inflamed with a series of attacks in Afghanistan.
European lists close in fractional decline and Wall Street retreats from the previous record levels. Frankfurt -0,45%, Paris -0,16%, Madrid -0,88%, London -0,33%.
Piazza Affari loses 0,76% and drops to 25.861 basis points, also weighed down today by the utilities, to which the banks join. At the top of the list there are only seven blue chips: Buzzi +1,35%, Tenaris +0,93%, Azimut +0,81%, Saipem +0,3%, Interpump +0,26%, Diasorin +0,19 .0,11%, Telecom +2,58%. The most consistent drops are for Italagas -2,25%, Terna -1,92%, Snam -1,07%, Enel -1,31%, Bper -1,29%, Banco Bpm -1,09%, Intesa -XNUMX%.
The spread remains stable, after yesterday's leap. The yield differential between the ten-year and German yields closed at 108 basis points with a BTP rate of +0,66%. In the meantime, the Treasury has placed 2,75 billion short-term BTPs with a 2-year maturity at auction with a still negative rate, but rising slightly by one percentage point to -0,29%. Also assigned 1 billion Btp indexed to 5 years with a yield of -1,20%.
We are moving cautiously in these hours on stocks and bonds, in an attempt to understand what central banks will do. In particular when the US central bank will start its withdrawal of stimuli, but also when the ECB is united in its choices. Meanwhile, this morning the Korean central bank raised interest rates by 0,25%, raising them from the historic lows of 0,50% up to 0,75% and making South Korea the first country with a developed economy attempt the approach towards a "pandemic normality".
Thus, while waiting to see if Powell will leak something about his intentions, James Bullard, president of the St. Louis Fed on CNBC, in the guise of a hawk says that “the Fed must start tapering and finish it in the first quarter of the 2022”.
Although in the US the cases of hospitalization for Covid have exceeded the threshold of one hundred thousand, as has not happened since last January, Bullard minimizes the potential negative impact of the Delta variant on the economy and highlights the risks of an increase in inflation "especially for families low-income". “There is an economic boom, there is no need for other stimuli,” he says, and “the economy has learned to adapt to the pandemic”. A tapering carried out quickly "would allow for greater flexibility on rates and, if inflation slows down, the increase in rates could be postponed".
According to Robert Kaplan, president of the Dallas Fed, the US central bank "should announce the tapering plan at its September meeting" and there should be a first interest rate hike in 2022.
In Europe, the minutes of the last meeting of the ECB, that of 22 July, instead bring to light a broad debate within the board regarding the new guidance on interest rates, which has been revised several times to meet objections and concerns. In the end, the heads of the German and Belgian central banks opposed the formulation, which says that rates will not rise until the ECB sees inflation reach 2% "well before" its projection horizon and stay on target in a lasting way.
The next meeting of the ECB will be held on September 9 and will have to decide whether to maintain a high volume of bond purchases or let them gradually decrease, given the decline in yields and the weakening of the euro recorded from July onwards.
To suggest what the behavior of central bankers might be today is also a series of macro data in chiaroscuro. In the USA, second-quarter GDP was revised upwards, +6,6 from 6,5%, but against expectations at +6,7%, while weekly requests for unemployment benefits increased by 4 thousand, more than as estimated.
In Europe, new signs of concern are emerging in Germany, relating to consumer confidence due to a very difficult pandemic to beat. In September it is estimated that German consumers will be more reluctant to buy. Business morale in the euro zone's largest economy fell in August for the second consecutive month.
Furthermore, the sentiment among Teutonic exporters is losing momentum. “Expectations in the manufacturing sector collapsed to 16,6 points in August - claims the Ifo institute - down from 23,1 points in July. Export expectations in the electrical and electronics sector have fallen sharply”.
The case of Dws, a subsidiary of Deutsche Bank, also made itself felt on the Frankfurt Stock Exchange. According to what was first reported by the 'Wall Street Journal', the SEC and also the US federal prosecutors are investigating DWS's use of sustainable investment criteria in the assets it manages.
The macroeconomic signals coming from France are mixed: confidence in the commerce sector is falling, that of businesses is rising. On the other hand, the data for Italian industry in the month of June collected by Istat are positive. The estimate of turnover, net of seasonal factors, is for a rise of 3,1% in economic terms. On an annual basis, turnover increased by 28,4%.
In May, the figure had recorded a revised -0,9% (from -1%) on the month and a revised +40,1% (from +40,2%) on the year. "The economic growth was favored by a particularly lively sales on international markets: the seasonally adjusted industrial turnover relating to the foreign component reached an all-time high, rising to the highest levels since the beginning of the historical series (January 2000)", says the 'Istat in a comment note.
On the currency market, the euro-dollar is stable at around 1,176. Among the raw materials, oil falls. Brent November 2021 futures drop 1,1% and trade at around $70,50 a barrel; Texan crude (October 2021) is down by a similar percentage and trades around $67,55 a barrel.
The restoration of production in Mexico is also weighing heavily, where a fire that broke out on an offshore platform on Sunday killed five employees of the structure and reduced production by more than 400.000 barrels a day. Pemex, the state-owned oil company, recovered 71.000 bpd of production and expects to restore another 110.00 bpd in the next few hours. Spot gold showed little movement, +0,2%, 1794,80 dollars an ounce.
