After the avalanche of criticisms that have invested the central banks, guilty of the lack of control of inflation, the markets corrected their course yesterday following the decisions made in Frankfurt and by the Federal Reserve. There ECB, in particular, knew put out the fire of the spread, which flew above 250 points in the morning, before falling back to around 210, thus ensuring space for a robust rebound of the Italian Stock Exchange. In the evening, the Fed chose, almost unanimously (10 votes in favor out of 11), to apply a monstrous increase in rates, 0,75%, last adopted in 1994. Again, Wall Street applauded the courage of the central bank. In short, the problems remain, but central banks seem to have overcome stagnation, the worst disease.
The Btp/Bund gap drops to 214 points. Milan at the top
The Italian square, the battleground in Europe, between hawks and doves, reacted strongly to the measures, albeit incomplete, hastily adopted yesterday morning to avoid the worst.
Il ten-year BTP it closes at 3,75%, 38 basis points less than the day before. The spread slips to 214 basis points from 240 yesterday.
Business Square it is the best in Europe and closes with a gain of 2,87%, climbing back to 22.473 basis points thanks to the bank pull.
The euro, after an initial run, returns to yesterday's levels against the dollar and trades around 1,04%.
The "exceptionally strong" increase in the US will not stand alone
No less eloquent is the reaction of Wall Street to the increase decided by the Fed, a move that the president of the central bank, Jerome Powell, defined as "unusually robust", however anticipating that in July we will proceed with another increase by 0,50% (or 0,75%). The Fed, as well as the head of the Treasury Janet Yellen, admits that they did not foresee the inflationary wave (+8,6% in May) and runs for cover with an eighties move. Wall Street appreciates.
Even in the US, the action of the central bank has blocked the rise in bond yields: the 3,482-year bond falls from 3,31% to XNUMX%, a shot in the arm for home mortgages and student loans.
The index S&P (+1,5%) broke a negative streak of five sessions. Dow Jones +1%. Best of all the Nasdaq (+2,5%), thanks to the recovery of technology stocks: Microsoft, Nvidia, Netflix and Amazon rose by an abundant 3%.
Banks are also doing well (+1,6%): JP Morgan has already raised the prime rate to 4,75%. Operators predict that official rates, currently at 1,50/1,75%, will rise to 3-4% within the year.
Today the Bank of England will also increase the cost of money
The Bank of England will also raise rates for the fifth time in a year today. The Swiss Central Bank should not go with the flow. But the spotlight is on tomorrow's much more uncertain Bank of Japan meeting.
Bloomberg: "Now the ECB must fill the empty sandwich"
Crisis overcome? Too early to tell, even if some sorties by the falcons bode well. Yesterday Klaas Knot, president of the Dutch central bank, firmly reiterated in Milan that "if the use of funds from the pandemic plan were not enough, we would use all the necessary flexibility".
In any case, the meager press release (150 words) issued yesterday after the emergency meeting imposed by the surge in the spread only ensures that "the ECB will apply flexibility in the reinvestment of funds recovered with the maturity of the securities purchased under the pandemic programme", but he refers "to the technical working groups" the task "of speeding up the completion of the design of a new anti-fragmentation tool".
In short, to quote Bloomberg, it has been noted that the markets have rejected the "empty sandwich" proposed by Lagarde without any ifs or buts. But there is still no agreement on the ingredients of the hamburger.
Expected to open higher in Europe. Oil down
The markets, on the other hand, appreciated the move by the Fed which, as Kevin O'Leary, president of O'Shares ETFs, told CNBC, "took the bull by the horns". This morning the index future Euro Stoxx 50 salt by 0,7%. Equities in Europe Asia Pacific are almost all positive. Nikkei of Tokyo +1,2%. CSI 300 of the price lists Shanghai e Shenzen +0,3%, Kospi of Alone + 1,2%.
It also bounces the Bitcoin over 22, interrupting a nightmare streak.
On the other hand, the decline Petroleum. WTI closed down 3% as Texas crude rebounded to $116 a barrel, up 0,7% this morning. The feeling is that the US squeeze will lead to a drop in consumption.
Capital Day in Maranello, Labriola (Tim) promises "good surprises"
This morning the CEO Benedetto Vigna will illustrate in Maranello, which celebrates the 75th anniversary of the most famous car plant, the awaited industrial plan of Ferrari (+3,26% yesterday). Last week, La Rossa obtained a one-year exemption to comply with the rules that ban combustion engines.
Pietro Labriola, managing director Telecom Italy, hopes that the group will surprise the market with "positive results" for the first half year. This is what the manager said during the presentation of the group's new communication campaign in Milan. “On 3 August we have the results for the first half, we hope to surprise with positive results, business is business goes in parallel with the corporate theme,” said Labriola.
Continue the swing of Saipem, yesterday -5%. Morgan Stanley raised the target price to 98,57 euros.
