In a geopolitical situation that remains incandescent, Business Square (+ 0,3%) and London (+0,47%) find the strength to close with moderate progress thanks to the rally in oil, while they are negative Paris -0,57% Frankfurt -0,55% and Madrid -0,25%. Overseas Wall Street, cautious at the start, is currently trading in the red, waiting to hear the words of Fed Chairman Jerome Powell who, last week, raised interest rates by 25 basis for the first time since 2018. The collapse of Boeing weighs heavily (-3,8%), a stock targeted by sales after the plane crash involving a 737 in China and which casts a new shadow on the US aerospace giant, ready to return the 737 Max to the skies for the first time after three years.
On the subject of central banks, there are the words of the number one of the ECB Christine Lagarde according to which the war will have consequences on economic growth, but for now there are no signs of stagflation, ie low growth combined with high inflation. On the burning issue of rates, Lagarde notes that the world's two major central banks will no longer be in sync for the foreseeable future, as the conflict has very different effects on their economies.
Russia-US diplomatic relations on the brink
And from the war front the news is not very reassuring, despite yesterday the Turkish press spoke of a close agreement between Moscow and Kiev. During the night the Russian bombing continued and the West is studying new sanctions, while the Ukrainian president Zelensky (who will speak to the Italian Parliament tomorrow) is asking for total sanctions on Moscow's trade. EU Foreign Minister Josep Borrell assures: “We will continue to talk about what kind of sanctions we can still think of. especially those related to energy”.
Perhaps more will be known after the phone call between the main leaders of European governments (including Mario Draghi) and US President Joe Biden.
In the meantime, however, diplomatic relations between the USA and Russia are escalating to the point of rupture. The American ambassador was in fact summoned from Moscow as Biden defined Vladimir Putin as a war criminal and bloodthirsty dictator.
Oil soars with sanctions and accidents
New soaring oil prices ahead of this week's talks between EU governments and Biden, in a series of summits that aim to tighten the West's response to Moscow.
According to press sources, EU governments will consider the possibility of imposing an embargo on Russian oil.
The attack by pro-Iranian rebels in Yemen also contributes to driving up crude oil prices, which is causing a temporary drop in production at the Saudi Aramco joint venture in Yanbu and fueling fears in an already nervous market, where Russia is a key supplier and global inventories are at multi-year lows.
Thus Brent is currently appreciating by 6,3% to 114,77 dollars a barrel and Wti is up by 5,63% to 110.6 dollars.
Piazza Affari rises with oil and utilities
The session closed positively for Piazza Affari thanks to the oil stocks.
The most toned blue chip of the day is Tenaris +6,09%. He hits the accelerator too Eni +2,88%, which, together with Sonatrach, communicated an important oil and gas discovery associated in the Zemlet el Arbi concession, in the North Berkine basin in the Algerian desert. The concession is operated by the joint venture of the two companies, with the six-legged dog at 49%. Saipem +1,33%.
Highly ranked Cnh + 4,46%.
The period remains favorable to Leonardo +2,94%, while Italy too plans to increase its defense spending.
The utilities archive a session in progress, with Enel +1,11% and A2a +1,91% well bought.
Accomplishments weigh on Diasorin, -4,23%. Among the bankers it retreats Mediobanca -2,2%. In industry it suffers Iveco -2,01%.
Telecom is in the red, -1,47%, after the agency downgraded the telephone company's long-term debt rating by one notch, from “BB+” to “BB”, following the sharp erosion of the gross operating margin in 2021 (-12% to 6,2 billion euros). Experts have also downgraded the outlook from stable to negative.
Spreads up slightly and the euro-dollar exchange rate flat
The sales of government bonds in the euro area continue. The spread between ten-year Italian and German it rises to 152 basis points (+0,82%) and the rates rise respectively to +1,97% and +0,44%.
Prices are falling and yields are also rising in the USA, after which the yield curve between the long and medium term is flattening. During the session, for a short time, the rate on the 5-year bond exceeded that of the 2,244-year Treasury, which at the moment is showing a sharply rising yield to 4,49% (+XNUMX%).
On the foreign exchange market, it is flat calm for the euro-dollar, with the exchange rate around 1,1.
Instead, he suffers Egyptian pound (-14%), under pressure for weeks, with the war endangering tourism and the supply of wheat, whose prices are now skyrocketing. Foreign investors reportedly withdrew billions of dollars from Egypt's treasury markets during this period.
For Goldman Sachs the Russian GDP will drop by 10%
Trading is partially back in Moscow, but the country's economic climate is visibly worsening.
Government bond trading resumed today, as the Russian central bank announced on Friday, with two trading windows and a ban on short selling. To prevent volatility, the Bank of Russia in a note explained that it will purchase federal bonds for the amounts necessary to limit the risks to financial stability, underlining that "the purchases will be made for the time necessary to complete the adjustment of the prices of the financial instruments under the new conditions”. The effect of this "umbrella" is being felt on bond yields. According to reports from Bloomberg, the yield on 10-year Russian public debt is down by 44 basis points to 11,84%.
Stock news should arrive within days.
But the economy suffers. Goldman Sachs today further cut pressure on Russian GDP for 2022, from -7% to -10%. "About half of this reduction is due to the fact that shipping data suggest that Russia's exports are more strongly disrupted than we initially assumed," said Clemens Grafe, an economic analyst at Goldman Sachs.
