Bond yields slide lower as inflation falls. The Bull is finally becoming convinced that the change of direction is based on solid foundations, starting from the drop in US ten-year rates to new medium-term lows at 4,27%, from 4,40% the day before. Compared to a month ago, the drop is approximately one point. The new reality is reflected in the performance of the stock markets. Hence the buying spree that is characterizing the penultimate session of November, the best month for the stock markets for three years now.
Stock exchanges latest news: Piazza Affari
In Milan the main index advanced by approximately 0,80% above 29,600 points. The macro data arriving in the morning contributed to triggering the rise: the movement started from Spain where the inflation rate fell to 3,2%. The German numbers anticipated this morning will be published at 14pm. From the state of North Rhine Westphalia: Year-on-year cost of living was 3% in November, up from 3,1% in October.
The run on T-bonds also pushes Bunds and BTPs
These data triggered new purchases of government bonds in the wake of the run-up in ten-year Treasury Notes. The German bund lost 5 points to 2,44%. It does even better BTPs traded at 4,17%, seven points less than the day before. at the lowest levels since the end of August. The spread drops to 174 points. Meanwhile, gold continues its march to $2.037, -0,2%, less than two percentage points away from the historic record.
As for the stocks, on the Ftse Mib tears Mps (+4%), exceeding the 3,072 euros pre-placement of the Treasury, a threshold touched in recent days. It also accelerates Stellantis (+3,4%), on a positive day for the European automotive sector, and Diasorin rebounds (+2,8%), after previous drops. Saipem performed well (+1,3%), which was awarded two offshore contracts, one in Guyana and the other in Brazil, worth approximately 1,9 billion dollars. Campari brings up the rear (-1,82%).
How long will the rally last? Experts are convinced that the the decline in US rates is coming to an end. Not so much due to the intervention of central banks who continue to preach caution, but due to the need of the US Treasury to guarantee good returns on newly issued securities. The American indices are oriented upwards awaiting the afternoon data: Useful indications may come from the Federal Reserve's Beige Book. In the spotlight are the data on American GDP, arriving today, and those on inflation, scheduled for tomorrow. Meanwhile, the impact on the markets of tensions in the Middle East is diminishing, although they remain the subject of great attention, while attempts are being made to prolong the truce between Israel and Hamas.