A warm air of peace is blowing on the markets. The announcement yesterday by the president Trump of the imminent start of talks with the Russia about the war in Ukraine has put the markets in a good mood, even if some fear that it is a somewhat premature enthusiasm. The fact is that stocks are rising, the euro has strengthened, oil has suffered heavy losses. And today looks positive on the price lists, based on the indications provided by futures, all rising. In a bad mood are the Treasury yields, since the high US inflation threatens to close the door to any easing of the monetary policy in the United States this year. In Asian markets, the tech sector is prevailing.
First steps towards peace in Ukraine. But is the EU ready?
Speaking to reporters in the Oval Office yesterday, President Donald Trump said he would likely meet with Russian President Vladimir Putin in Saudi Arabia. Trump in a phone call with Russian President Vladimir Putin agreed to start negotiations to end the three-year war in Ukraine, taking Europeans by surprise. Meanwhile, Defense Secretary Pete Hegseth laid out the U.S. vision at a meeting with his NATO counterparts in Brussels. Hegseth said it's not realistic to think that Ukraine will join theWestern Alliance or that reconquer all the territory lost since 2014 and the United States will not provide troops to no peacekeeping force. Hegseth added that he was convinced that NATO would prosper as long as its European members will do their part. “This will not happen by chance,” he said. “It will take our European allies must step up and take responsibility of conventional security on the continent”. The question now is whether Europe will be able to do so. Bloomberg Economics estimates that protecting Ukraine and expanding their armies could cost the continent’s major powers an additional $3,1 trillion over the next 10 years. And if the Europeans fail to mount a convincing deterrent, Putin will only step up his efforts to weaken and eventually dismantle both the EU and the NATO alliance. Such an effort would expose the fractures that the EU has glossed over for years.
Wall Street Recovers From Session Lows At Close
In the end, the signs on Wall Street are negative, but much less than what was seen during trading, hit by the data on US inflation. The Dow Jones leaves 0,50% on the floor, the S&P-500 closes below the levels of the day before at 6.052 points. At parity the Nasdaq 100 (+0,12%), as well as, without direction, the S&P 100 (-0,1%). The main indices during the session had fallen after the data on US inflation which in January rose more than expected to the highest in almost 1 months, thus decreasing the probability of a rate cut by the Fed. Investors have reduced expectations of a further easing of monetary policy by the Federal Reserve this year to just 28 basis points, equivalent to a single cut, while others are starting to think about possible increases in the future.
I Treasury yields jumped after the inflation data, with 10-year yields rising 10 basis points to reach a maximum three weeks of 4,66%. Today they are down 2 basis points at 4,6151%.
Futures are looking ahead to a positive stock market session today. Nasdaq futures rose 0,4% while S&P 500 futures gained 0,2%.
Asia dominated by tech: China supports new real estate default case
In Asia, the tech sector is dominating the scene. Hong Kong's Hang Seng Index is up +2,70%, hitting another four-month high and registering a 10% increase since the beginning of the year. In particular, its Hang Song Tech is one step away from the highs reached with the rally triggered by the reopening after the pandemic in the wake of the effervescence for artificial intelligence that started with the announcement of DeepSeek. Another beneficiary is Alibaba, which continues to rise and reaches a +44% increase since the beginning of the year. Nissan and Honda formally end merger talks, scuttle $60 billion deal
Il Nikkei Japan's 1,4-year government bond yields rose 19%. Producer prices rose the strongest in 4,2 months in January, a sign that the Japanese central bank is set to raise interest rates again. The index rose 2024% from a year earlier, largely driven by higher prices for agricultural products such as rice. In December 3,9, the increase was 4%. The consensus was XNUMX%. Yields on XNUMX-year Japanese government bonds continued to rise, reaching their highest level in recent years. 15 years. Last month, the BOJ raised its key interest rate to its highest level in 17 years, a survey found. Bloomberg Conducted after the January policy meeting, more than half of BOJ observers said they expected the next hike in July.
The index Msci Asia-Pacific's broadest share outside Japan rose 0,3%. Weaker were bags of China: CSI 300 index of Shanghai and Shenzhen stock exchanges +0,2%. Chinese authorities are working on an intervention to support the precarious China Vanke manufacturer to fill a funding gap of about 50 billion yuan ($6,8 billion), it writes Bloomberg. Regulators will allocate 20 billion yuan of special tranches of local government bonds to purchase unsold properties and land. Vanke and its affiliates will be able to tap other sources of financing, including new bond sales and bank loans, to service the debt.
In the rest of Asia Pacific, the index TAIEX extension Taipei's stock market closed up 0,5%. South Korea rises, KOSPI index +1,4%. The Indian stock market opened in positive territory: KOSPI index +XNUMX%. BSE sensex + 0,7%.
Euro Strengthens, Oil Sinks
In the foreign exchange market, the dollar held at 154,52 yen, having jumped 1,3% overnight as U.S. yields soared. The euro fared much better, having recovered from earlier declines: it rose 0,5% to $1,0431, rebounding from a low of $1,0317 overnight and now faces stiff resistance at its January high of $1,0535.
In the commodity markets, the oil prices extended last night's decline, on hopes of a peace deal between Russia and Ukraine that would mean an end to sanctions that have disrupted supply flows. U.S. crude fell 0,7% to $70,88 a barrel, after dropped by 2,7% overnight, and Brent also fell 0,7% to $74,66, after falling 2,4% overnight. Their remained unchanged at $2.902 an ounce, not far from the all-time high of $2.942,7 hit on Tuesday.
European stocks seen opening decidedly positive
The air of peace is also blowing in Europe, with European stock markets seen opening in a decidedly good mood, based on indications from the EUROSTOXX 50 futures up 1,04%.
Team. Yesterday the board of directors gave the green light to the sale of Sparkle, the submarine cable company, for 700 million euros. The company closed 2024 with total Group revenues of 14,5 billion euros, up 3,1% year-on-year (+1,5% in the domestic market to 10,2 billion euros, +6,8% in Brazil to 4,4 billion euros); Group service revenues grew by 3,4% year-on-year to €13,5 billion (+2,0% in domestic to €9,3 billion, +6,6% in Brazil). The Group's adjusted Net Financial Debt After Lease at 31 December 2024 fell below €7,3 billion, down by €0,8 billion. The Board of Directors approved the update of the 2025-2027 strategic plan, which aims to position the Group as the best and largest digital and telco platform in Italy and as the most efficient TLC operator in Brazil. Thanks to the cash generation expected in the plan, leverage will be further reduced and shareholder remuneration will be resumed, while maintaining financial flexibility and a solid capital structure.
Commerzbank will cut 3.900 jobs, mostly in Germany, as it pushes back against UniCredit. The partly state-owned bank has described UniCredit's moves as hostile and said it will take on 700 million euros in restructuring charges in 2025.
Credit Agricole has appointed Hugues Brasseur as general manager and CEO of Credit Agricole Italia ahead of the next shareholders meeting on April 23. Barclays has raised its target price from 8,8 to 9,5 euros (overweight rating).
Generali. Unicredit holds 7% as of February 5,118, of which 4,184% with voting rights, while the rest is through long positions, according to Consob updates.
Italgas will launch the capital increase to finance the acquisition of 2i Rete Gas before the summer, said the CEO, Paolo Gallo, during the presentation of the 2024 accounts (adjusted net profit of 506,6 million euros, up 15,2% compared to the same period of 2023 on revenues of 1,778 billion, +0,2%).
Germany. Inflation in Germany slowed in January in line with the end-of-month data, which indicated an increase of 2,3% on an annual basis, after +2,6% the previous month.
On a monthly basis, there was a -0,2%, equal to the preliminary estimate, after the +0,5% of December.
