A thrilling session for the European Stock Exchanges, especially for Piazza Affari which loses almost double the other price lists (-5,17%), in the aftermath of the ECB announcements on the end of the purchases and on the rise in interest rates, starting from the month of July.
Bank of Italy and the Bundesbank also revise their growth forecasts for Italy and Germany downwards, while estimating rising inflation.
At the origin of the financial earthquake, which is also affecting Wall Street (negative at the start), there really is inflation, a very difficult dragon to tame, as evidenced by the leap in consumer prices in the month of May in the USA (+8,6%), supported by the race in the price of petrol . The figure, released today, is higher than expected and is the highest for 41 years, despite the fact that the Fed has already started its process of normalizing monetary policy. Inflation runs faster and faster, while it was hoped that it had peaked, and this could prompt the US central bank, which meets next week, to move faster and more aggressively than previously estimated. In anticipation that this could happen, the dollar strengthens and the euro falls: the single currency trades with the greenback in the 1,05 area, down by about 1%.
The data on US inflation then weighs on the T Bonds: the two-year bond yield rises to over 2,9%; the 3,1-year term goes over +XNUMX%.
Finally, problems in the supply chains contribute to supporting prices, which could worsen with the return of anti-Covid restrictions in Beijing and Shanghai, which also lead to fears for demand and the growth of the second world economy.
News from China is holding back oil, which is nonetheless starting to end a week in progress. Brent is currently trading down about 1% to $121,8 a barrel.
Europe in deep red and spreads on the rise
In a context in which refinancing debt will become much more expensive, Piazza Affari is the worst in Europe and retreats up to 22.547 basis points.
Le banks have been overwhelmed by a wave of sales, due to thesoaring spread, which climbed to 230 basis points, before declining slightly. At the finish line, the yield differential between 10-year BTPs and Bunds of the same duration is 225 basis points (+3,9%), with rates at +3,74% for the Italian bond and +1,49% for the German bond. At the origin there would also be the disappointment of investors for the expected anti-spread shield on which Lagarde was very vague yesterday.
Returning to the stock market, in the rest of Europe Madrid lost 3,68%, Frankfurt -3,05%, Paris -2,7%, Amsterdam -2,52%. Outside the Eurozone: London -2,17%; Zurich -2,4%. In particular Credit Suisse it yields 5,72%, weighed down by the fact that the American bank “State Street” has denied being interested in acquiring the number two in the Swiss banking sector.
The blue chips of Piazza Affari are all negative
The blue chips of Piazza Affari are all negative and the list starts from Bfor, after the presentation of the industrial plan which evidently did not make inroads with investors, despite profitability and remuneration targets in line with or higher than expected. The Modenese bank, which had grown a lot in recent times, lost 12,92% and in its wake the shareholder Unipol fell -8,2%.
The burden is double-digit also for Banco Bpm, -12,05%, while Unicredit sells 9,1% and Intesa 7,38%.
Il managed savings remains in check: Finecobank -9,47%, Azimut -9,08%, Banca Generali -8,3%. Among the oil stocks, Saipem sinks, -7,97%.
Losses are heavy even for the automotive sector, starting from Iveco -7,35%. Ferrari limits damage to 1,61%. According to rumors reported by Bloomberg, the prancing horse is planning to significantly increase the size of the factory in Maranello as part of the electrification strategy. The expansion project would include a new production line, the third, for hybrid and electric cars and a new research and development center also dedicated to batteries.
Bank of Italy: growth slows down and inflation rises
The Bank of Italy revises its economic forecasts downwards for the three-year period 2022-2024, with rising inflation.
This year's estimate for the GDP goes up to +2,6%, from +3,8% assumed in January, while inflation rises to 6,2% (from 3,5%). In 2023 the estimate is +2,7% (from +1,6%) and it "normalizes" to 2% only in 2024 (from +1,7%).
The scenario predicts that the war-related tensions – which it is assumed will remain confined to the territories currently involved – will continue throughout the year, continuing to support the prices of raw materials, keeping uncertainty high and slowing down international trade. For 2023, Bankitalia sees growth falling to 1,6% from the 2,5% assumed in January and for 2024 the estimate is 1,8% from the previous 1,7%.
Also the Bundesbank has revised its forecasts downwards growth for Germany: +1,9% this year, with inflation expected to rise to 7,2%.
