Ithe jump in US inflation, at its highest level for over 40 years, shakes the European stock exchanges and Wall Street, but does not knock out the euro. The single currency, after a momentary loss under parity, traded slightly against the dollar in the 1,08 area.
Even bonds appear to have moved little, both in the US and in Europe, while oil is trying to rebound. Brent and WTI futures are trading in fractional growth (Texan crude oil is still below one hundred dollars a barrel), but are moving in the Bear zone, for a decline of more than 20% from the June peak.
The gas goes up on the square in Amsterdam, over 180 euros per MWh.
European lists close in red
In Europe, the closure of the markets is in the red, but slightly recovering from the lows of the day.
Piazza Affari loses 0,93% and retreats to 21.286 basis points, overwhelmed by sales on Saipem and banks. Frankfurt loses 1,17%, Paris -0,73%, Madrid -0,91%, Amsterdam -0,71%, London -0,75%. Banks, healthcare and mining are the worst performers.
US inflation beyond expectations
The mood was dictated by the expected data on consumer prices in the US in the month of June, a fundamental element for the choices of the Federal Reserve. Every year the leap is 9,1%, beyond expectations and a record since 1981. For President Joe Biden, however, they are outdated numbers, as fuel prices have been falling for 30 days.
The White House tenant's opinion is shared by some analysts, according to whom the price run may have reached its peak. In any case, the chances are growing that the Fed raises rates by XNUMX basis points in a couple of weeks: according to traders, quoted by Radiocor, the percentage goes from 7,6% yesterday to 42% today. According to Reuters, investors are now expecting a final rate of 3,60% by December 2022, up from 3,41% seen before the release of the data.
The latest minutes show that the intention of the Fed would be to move with an increase of 50 or 75 basis points, after the intervention of 75 points decided four weeks ago. A relatively cautious step is appreciated by some bankers such as the president of the Federal Reserve of Kansas City, Esther George, who considers "too rapid" increases risky, since they could destabilize the stars and stripes economy. The inversion of the T-Bond yield curve these days seems to testify to a risk of future recession.
Inflation is also overwhelming in Europe, especially in Spain which in June shows a monthly increase of 1,9% and an annual leap of 10,2%. In Germany the annual rate is 7,6%, in line with expectations. In France +5,8% per year.
Also the ECB he should intervene on rates at the July meeting. The European Central Bank is also monitoring the euro exchange rate due to its impact on inflation, although it does not have a specific target.
On the other hand, the road to monetary tightening is the one chosen almost all over the world: even the central bank of South Korea has raised the rate by half a point, implementing an unprecedented move.
On the macro front, Great Britain's GDP improved to +0,5% in May, beyond forecasts, reinforcing the belief that the BoE will continue its course of tightening of monetary policy.
Also in May, industrial production in the euro area increased by 0,8% compared to April and in the EU by 0,6%.
Piazza Affari attempts a toast with Campari
It's no toast, but in the end the damage is limited in Piazza Affari thanks to the holding four blue chips: Campari +2,33%, Diasorin +1,88%, Inwit +0,25% Stm +0,11%.
The red is still glowing instead for Saipem, -43,2%, after the 2 billion euro capital increase subscribed, in the option phase, only at 70% and the scarce interest in the unopted shares. At the end of the auction, in fact, unexercised rights corresponding to approximately 9,9% of the new shares offered were sold, according to a note from the company. The pool of banks in the consortium guaranteeing the capital increase will therefore have to subscribe at least 400 million of the 2 billion requested by the oil service.
They also weigh on the price list bank sales, with Bper -2,6%, the black shirt of the sector. The automotive sector is down with Iveco —3,32%, Pirelli -3,11%, Stellantis -2,42%.
Among the utilities, Hera falls -3,42%. Profit taking penalizes Leonardo -2,81%, after yesterday's gains.
Spreads up; auction yields fall
The internal political chaos does not seem to rock the Italian secondary, which closes in the red, but with a relatively modest increase in the spread at 205 basis points (+0,99%). The ten-year BTP rate rose to +3,14% (from 3,1% yesterday) while that of the Bund with the same duration was more stable, +1,09% (from +1,08%).
In the morning Treasury auction yields fell sharply for 3 and 7 year BTPs, not for 15 year ones. In total, 3,25 billion bonds have been sold by 2025, with a yield of 1,84%, down 120 basis points from the previous auction. The BTPs in 2029 were 2,5 billion, with a yield of 2,76%, down by 99 basis points. Lastly, €1,25 billion of 15-year Treasury bonds were placed, maturing in 2038, with a gross yield of 3,45%.
