European stocks seek rebound after Russia-Ukraine war crash: Nasdaq super

After yesterday's collapse, the European stock exchanges are trying to recover as the Nasdaq and the Asian lists have already done - Due to the sanctions, oil is back below 100

Panic selling dictated by geopolitical crises tends to be short-lived. The rule seems to find confirmation on the markets in these terrible days in which, as Ukrainian president Zelensky has said, an iron curtain is once again falling over Europe. The Nasdaq opened with a dramatic -3,5%, hitting its lowest level in twelve months, but then rallied during the session to close with a gain of 3,34%. The turnaround coincided with the announcement of US sanctions against Russia, heavy but less than requested by Kiev, because the Swift payment system, which would have paralyzed oil trade, was not blocked.

Crude oil falls to 95 dollars, Tokyo rises

Crude oil prices immediately dropped from $106 to $99. Now in Asia it costs 95 dollars.

The reaction of the markets clashes with the increasingly dramatic news arriving from Kiev. Russian ground troops are on the outskirts of Kiev and tonight thousands of people slept in subway stations for fear of bombing. But the tensions, obviously very deep in Europe, are less strong in the USA, where we look with greater interest at the inflation data to be released in a few hours, and in Asia, which followed Wall Street's recovery overnight.

Tokyo's Nikkei gains 1,7%. Kospi of Seoul +1,3%. Mumbai's BSE Sensex opened 2% higher and the Indian rupee is rebounding. CSI 300 of the Shanghai and Shenzen price lists +0,8%.

China injects heavy liquidity into the system

The Central Bank of China intervened tonight in support of a market shaken by the war in Ukraine. The People's Bank of China provided 290 billion yuan ($45,8 billion) to the financial system through a seven-day reverse repurchase transaction: the central bank has not intervened with this amount since September 2020 ample.

Hong Kong's Hang Seng is down 0,2%, even as Chinese tech companies are up more than 1%. Alibaba gains 2% the day after the presentation of the quarter's data.

The T-bond trades at 1,95%, futures are down

Wall Street futures signal a bearish start to the session after yesterday's formidable change of course: the S&P went from -2% to +1,50%, Dow Jones +0,28%.

The 1,95-year Treasury Note trades at 100%. Federal Reserve Governor Christopher Waller said yesterday he was in favor of raising interest rates by half a percentage point. “My preference is for a XNUMX basis point increase in the target range by the middle of this year,” he said.

The dollar index, which rose yesterday to its highest since May 2020, is down 0,3%. Euros +0,2%, to 1,122.

A rebound in the Eurostoxx index is in sight

Yesterday's increases can be explained from a technical point of view with the purchases of hedge funds which, when dismantling the sales operations through derivatives, must obtain the shares to be delivered to the counterparties. The same phenomenon is behind this morning's rise in futures on the Eurostoxx 50 (+2,1% according to the Financial Times) which will probably be followed by a session with high volatility.

Schnabel (ECB): the end of Qe can be postponed

“Biden said it over and over again. The US intelligence sources reiterated this, and there were unequivocal indications. We didn't believe him. I didn't believe him. How come?". The confession of Giuseppe Sersale di Anthilia well expresses the estrangement of the markets for an invasion that, from a rational point of view, escapes. Above all because the bill is high for everyone, from Russia to China, but also for the West. The costs of this tragic event will hit everyone. Hence the collapse which, without exception, hit the European markets yesterday, heading towards unprecedented sanctions. But now? On the ECB front, the hawk Holzmann, governor of the Austrian central bank, argued that, after yesterday's news, Frankfurt could postpone the end of the stimuli. Germany's Isabel Schnabel has also come out in favor of Qe.

The economic sanctions decided last night, however, impose robust and painful choices. From the point of view of central banks, there will be less desire to raise real rates. But nominal rates will rise even if they bite less for inflation. In practice, therefore, central banks will not radically change the normalization program they had in mind and will simply be more cautious, turning a blind eye and a half to inflation.

BTPs hold better than Bunds: spread at 160

The outlook, paradoxically, favors weaker bonds. The escalation of the Ukrainian crisis accentuates the risk-off climate on the markets, allowing the Italian secondary to close the gap with respect to the Bund. The yield spread between BTPs and the German counterpart on the ten-year segment narrows significantly, returning towards the area of 160 basis points.

The durability of the Italian paper is particularly significant if one considers the supply agenda: the Treasury is engaged today in the medium- and long-term placement at the end of the month for a maximum amount of 8,25 billion euro. Available to investors up to 4 billion of the new 5-year BTP in April 2027 together with the 2032-year June 2,5 (3-2026 billion) and the thirteenth tranche of the CCTEU in April 1 (1,25-XNUMX billion).

Judging by last night's secondary prices, the placement will lead to another sharp rise in allotment rates. On the gray market, new five-year bonds pay around 1,12%, the highest since April 2020, compared to 0,50% at the end-January auction. The dynamics of the 1,80-year rate are identical, hovering around 1,39% compared to XNUMX% in the previous auction.

At yesterday's auction of six-monthly bonds, the Treasury placed bonds worth 6 billion (8,1 billion the request). The average yield is still negative at -0,484% (compared to 0,488% of the previous placement).

Milan and Frankfurt the most affected, Moscow -33%

Piazza Affari together with Frankfurt is one of the worst. The Ftse Mib loses 4,15% and falls back to 24.877 basis points; the Dax marks -3,98%. Paris -3,83%; Madrid -2,8%; Amsterdam -2,66%; London -3,86%.

Shoulder bag Moscow: – 33,28% in rubles, -39,44% with the index in dollars. It is confirmation of the price Putin is willing to pay to wage war on the market economy.

Apart from equities, other markets also paid a heavy price to coincide with the bloodbath on the banks of the Dniestr.

Oil up to $105, gas and wheat are splashing

The strongest repercussions are felt immediately on the raw materials sector. Oil, in the first place: Brent triggers an unstoppable run and once the threshold of 100 dollars a barrel is broken upwards, it goes up to above 105 dollars, the highest level since 2014. Even the WTI advances and rises to triple figures.

The situation for European gas is even more tense: the price rose to a peak of 159 dollars per megawatt hour (+69%) before falling to +40%. Deposits from the old continent are at a 5-year low.

The prices of cereals also soared and the cost of wheat, of which Kiev is one of the main producing and exporting countries, rose by 5,90%. Ukraine and Russia account for 14% of world production and 30% of global exports. Soy (+2,87%), corn (+5,47%) and oats (+4,81%) also increased.

Aluminum prices surpassed the 2008 peak and approached the $3.400 per ton threshold, reaching $3.388.

Leonardo runs to Piazza Affari, holds Eni

There is no shortage of plus signs in Piazza Affari. Leonardo goes up against the trend (+4,3%): the stock benefits from the strong exposure to the defense sector, both traditional and in terms of cybersecurity, and also from the signing, together with Airbus, of the global contract for the Eurodrone.

Diasorin was also positive, up 2,5%, and Amplifon, +2%. Campari rebounds after the landslide (+1,8%), promoted by Deursche Bank analysts after the almost 10% decline recorded on Wednesday, following the accounts. Money on Saipem (+1,9%), while the other oil companies contain their losses thanks to the rally in crude oil: Eni -0,5%, Tenaris -1,1%.

Unicredit -13,5%, black jersey of European banks

In the rest of the list, the collapse of Unicredit (-13,5%), a thread above Société Générale (-12,4%) takes place. At the end of 2021, the Russian subsidiary of Unicredit accounted for around 4% of the Group's operating profit. Loan exposure amounted to 7,8 billion. Banco Bmp (-8,2%), Bper (-7,6%) and Intesa Sanpaolo (-8,2%) also fell sharply. The Stoxx Banks index falls by 7% and suddenly wipes out the excellent earnings accumulated since the beginning of the year: now the balance sheet since January 1,2st is in the red by 4%. The global Stoxx index, down 11% today, has lost XNUMX% since the beginning of the year.

There was a heavy drain on managed savings: Banca Generali -8,6%, Mediolanum -8,5%.

Dark red for Pirelli: Buzzi and Maire down

The black jersey for industrialists touches to Pirelli (-10,4%). Other stocks exposed to the business with Moscow fell sharply: Buzzi, Maire Tecnimont and Danili left between 6 and 8% on the ground.

The price for the car is also heavy. The hardest hit is Renault (-12%), owner of Autovaz, but Stellantis also lost 5,6%, in line with the European sector index.

In the textile-clothing sector, the hardest hit is Geox (-15%), which generates 8% of its turnover in Russia. The luxury balance sheet is heavy: Brunello Cucinelli and Moncler are down by 6%.

Telecom loses 2,45%, despite the go-ahead from the Antitrust to Fibercop. The company says it is very satisfied: "AGCM's decision - he underlines - confirms the effectiveness of the project".