For the World Bank stagflation risk “is material”. The US Treasury Minister, Janet Yellen, regretted having underestimated the risk of inflation, today predicts that within the year the increase in prices will reach "unacceptable levels". But alongside these alarm signals the first optimists appear, starting with Ray Dalio, the billionaire of the Bridgewater fund, a great admirer of China. You will see, he writes, that the central banks will have to reverse the policy of high rates that the economy, especially the poorest countries, cannot support. Dalio forecasts that the economic slowdown caused by the rate hike will lead to the start of a new expansive monetary cycle around the fall of 2024. In short, be patient.
Bank of India expects cost of living above 6%
Meanwhile, pending tomorrow's decisions by the ECB, the list of countries that have increased the cost of money has been extended tonight. The Central Bank of India announced the increase in the reference rate by fifty basis points, more than expected. The institute expects inflation above the tolerance threshold of 6% until at least the end of the year. The rupee showed little movement, while the Mumbai Stock Exchange fell slightly.
This morning in Asia Pacific la Tokyo Stock Exchange is up about 1%. Japan's economy closed the first quarter with a less severe contraction than had been anticipated, -0,5% compared to the same period of the previous year, which compares with the -1% of the first reading. But, after the ECB's breakthrough, tomorrow, the Bank of Japan will be left alone to defend the policy of sub-zero rates. As usual, the Japanese samurai are the last to surrender.
The recovery of the Chinese Tech continues
The recovery of Chinese stock markets continues, favored by the easing of credit measures and constraints on the tech sector. The Hang Seng of Hong Kong is up 1,7%. Hang Seng Tech +3,3%. CSI 300 of the price lists Shanghai and Shenzhen -0,5%. Kospi of Alone around parity.
Multi-faced sitting yesterday in the Use: declining start, a strong rebound, then parity. The US markets did not miss anything in a day without a precise direction. In the end the Bull prevailed: Dow Jones +0,8%, S&P 500 Nasdaq +0,95%.
Wall Street swings, then chooses the upside
To mark the session, including the happy ending, was Target, the retail giant that has launched a warning, the second in two months, on profits. Soon, the company writes, we will be forced to cut prices and launch a series of spectacular sales to empty warehouses and entice the inflation-scared public. Yesterday, after starting at -7%, the stock recovered up to -2,3%. Wal-Mart lost just 1,2%. Kohl, targeted by the Franchise group, even earns 9,5%. This reaction, two days after the consumer price data, has led the markets to focus even more on reaching the inflation peak, favoring the recovery of the price list: over the last hundred years, in the twelve months following the achievement of a peak inflation rate in the United States, the average rise of the S&P500 was 13,3%.
T bond at 3%, Btp at 3,30% on the eve of the Frankfurt directorate
Opinions on inflation, however, differ. The 2,97-year in the United States moves little, at 3,04%, from 44% on the previous day. The auction of three-year bonds worth 2,45 billion dollars ended last night with sluggish demand: bid to cover at 2,59, from XNUMX in the previous Treasury financing operation.
Today is the reopening of the 33-year bond, with a target of $19 billion in funding, tomorrow is the $XNUMX billion auction of thirty-year securities. For the Treasury, these auctions are the first major appointment after the start of the Federal Reserve's balance sheet reduction.
ECB towards the end of negative rates, +0,25% in July.
Contrasted the futures of the European Stock Exchanges, down yesterday: EuroStoxx index -0,9%, Milan's Ftse Mib -0,8%, Frankfurt's Dax 0,6%.
Il ten-year BTP it reopens at 3,29% from 3,40%, pending the key event of the week, the ECB directorate on Thursday. Spotlights on the words that the number one, Christine Lagarde, will pronounce in the usual press conference. Peter Goves, Fixed-Income Research Analyst at MFS Investment Management writes that, according to projections, “the central bank will announce the end of QE in June and reiterate its intention to raise rates by 25 basis points in July and end of the negative rate policy by the end of the third quarter. This should keep core rates in bearish mode for now."
Kepler raises Ferrari's target, S&P promotes Autostrade per l'Italia
While awaiting the opening of Piazza Affari, it should be noted that yesterday evening S&P improved its rating by Autostrade per l'Italia to BBB-.
KeplerCheuvreux upgraded to Hold, from Reduce by Ferrari. New target price at 180 euros.
Tim signed an agreement with the trade unions for a maximum of 1.200 voluntary departures from Italy by November, through early retirement. As for investments in the fiber optic network, Agcom has taken note of Tim's unilateral decision to modify the proposal for co-investment commitments on very high capacity networks with the introduction of a price indexing mechanism that takes inflation into account , making it necessary to proceed with a new assessment by the guarantor.
A2A completed the acquisition of wind and photovoltaic portfolios from the Ardian fund, investing 452 million euros for 352 MW of total power as envisaged in the contracts signed last January.
