The time has come for rate hikes. Tonight Jerome Powell will illustrate the Fed's battle plans. Tomorrow it will be the turn of the Bank of England, preceded yesterday by the Royal Bank of Australia. And the pressure on the ECB is growing. Isabel Schnabel, German member of the bank, declares this morning on Reuters that “an increase in July is possible”. In short, it's time for the hawks: the markets discount an increase in interest rates in the United States of at least 50 basis points, bringing the increase in the cost of money within the range of 0,75% - 1%. It seems unlikely that the US central bank will be able to raise rates by 75 basis points with the risk of further weakening the domestic economy. The markets await, resigned, the start of the tightening which will also affect the abundant liquidity of the Fed's balance sheet.
Stock exchanges in India, Korea and Australia are around parity. The markets of China and Japan remain closed for holidays. This absence limits or conditions bond trading.
In Hong Kong, the index Hang Seng Tech is down 3%. Didi Global, the Chinese Uber that landed on Wall Street last summer with a billion-dollar IPO, has been investigated by the US financial authorities: in the post-market, the share of the delivery and delivery company has come to lose 7% , from the debut price is down 85%. The index Hang Seng of Hong Kong loses 1,3%.
Little move yesterday Wall Street; S&P + 0,48% Nasdaq + 0,22% Dow Jones +0,20%. Wall Street futures, as well as those of European stock exchanges, are around parity.
Il Treasury Notes at ten years it is little moved at 2,97% yield.
It was an important day for US politics. The focus is on the scoop of Politico, which revealed how the majority of the Supreme Court (5 out of 9) is oriented towards revoking the right to abortion. The outcome of the primaries in Ohio is also largely in favor of the right. Donald Trump-sponsored candidates won the Ohio primary by wide margins. The former adviser to tycoon Max Miller wins the primary for the House, while the former venture capital, JD Vance, those for the Senate.
Little moved the other macro data:
- The dollar is almost unchanged. The cross against the euro is just above 1,051.
- WTI oil up 1% to $103,5 a barrel.
- Gold remains down, at 1.863 dollars an ounce.
- Bitcoin slightly up around 38 thousand dollars.
The bund above 1%, increases the pressure on the Btp
“The prospect of a tightening on ECB purchases risks driving up the cost of debt. Countries like Italy run a double risk: increased spending and decreased growth”. So the Financial Times comments on the hitherto limited worsening of the financial conditions of Corporate Italy.
In the meantime, other signs of overheating inflation arrived yesterday. Producer prices in the euro area rose by 5,3% in March, a very strong acceleration from the +1,1% in February. The consensus was expecting a 5% month-over-month increase.
The price increase, combined with the expectation of the Federal Reserve's decisions, brings down another historic wall: the German 1-year yield rose up to 2015%, the highest since 0,95, to then fall back to +XNUMX %.
The 10-year BTP rate closed at +2,84%, for a stable spread at 189 basis points.
While awaiting Jerome Powell's decisions, the euro-dollar appears to be not far from its five-year low, around 1,052.
Oil, EU towards the embargo (except Hungary). Dragons: unanimity is enough
Among raw materials, oil is down (Brent -1,62%, 205,83 dollars a barrel), while the European Commission will announce tomorrow the sanctions of the sixth package against Russia. Among the products affected will be crude oil: the grace period will last until December 31, 2022, but from January there will be a complete stop with the exception of imports from Hungary and Slovakia, which are extremely dependent on Russian oil.
Prime Minister Mario Draghi has said that the EU institutions are not adequate for the reality they have to face, calling for a revision of the Treaties to move from unanimous decisions towards a qualified majority system.
Moscow pays bonds in dollars
Some holders of Russia's sovereign Eurobonds have received payment for two dollar-denominated bonds that were due on April 4. Russia appears to have changed its tack to avoid a bond default on Friday after the Finance Ministry announced it would pay nearly $650 million owed in coupons and principal to bondholders before the end of the grace period, scheduled for Today. A senior US official confirmed that Moscow made the payment without using reserves frozen in the US, adding that the exact origin of the funds was unclear.
European Stock Exchanges: Tuesday's trend
Milan +1,61% rebounds thanks to banks and cars
Piazza Affari seizes the opportunity of a rebound thanks to some better-than-expected quarterly reports, banking stocks and the automotive sector. The main Milanese listing closes up by 1,61% and recovers the psychological threshold of 24 points, stopping at 24.242.
The EuroStoxx 50 rises by 0,8%.
In Frankfurt alarm on raw materials; Covestro -6% on tilt
Well Amsterdam (+1,66%) and Madrid (+1,86%). Further behind Frankfurt (+0,71%). The German stock index is depressed by -6% Covestro, the company producing basic material for plastics has revised downwards its forecast for 2022, the cut was caused by the non-arrival of raw materials from China.
The accounts of Bnp Paribas (+5%) push Paris. Luxury is bad
The Cac40 of Paris is up by 0,8% driven by BNP Paribas (+5%). The first Bank of France ended the quarter with a 19,2% increase in net profits, thanks to the strong increase in trading activities.
Luxury companies are still down: Kering -1,6%, Hermes -2,5%.
BP superstar after the devaluation of Russian assets (25 billion)
Slightly down London (+0,24%). BP gains 6% in London on quarterly data release day. The result of the oil & gas activities beat the expectations of analysts, who had already taken into account the effects of the cancellation of the stake in Rosneft, a decision that led to a write-down of 25 billion dollars. The company has also increased its share repurchase plan.
Car sharing is good for Stellantis (+3,16%). Also runs Cnh
Strong signs of recovery for Stellantis (+3,16%), which, awaiting tomorrow's quarterly report, scores the purchase of the car sharing company Share Now, a joint venture between the BMW Group and MercedesBenz Mobility; a good way to react to the stall in sales of four-wheelers on the Italian market. Free2move, another car sharing brand of the group, has a fleet of 450 cars.
The quarterly results give sprint to CNH (+3,39%): “We are actively managing the effects associated with the increase in cereal prices, the potential food shortage and the increase in energy costs. Although these macro-phenomena do not help, we are maintaining our initial guidance for 2022", commented CEO Scott W.Wine, adding that he expects logistical pressures and semiconductor shortages "to remain unfavorable throughout the year". Iveco also advanced (+3,05%).
Mediobanca does not stop. The auction for the Bper platform is underway
The banks are in great shape, thanks to the rise in market rates and the push from Paribas. In Milan he leads the Mediobanca race (+ 3,26%), still in the money after the extension on the eve. Banco Bpm also runs (+2,63%). Bper (+1,56%) has started negotiations for the sale of the NPL credit platform. In the red Unicredit (-0,13%).
Superstar oil producers despite the tax on extra profits
Oil stocks tower over the Ftse Mib: Tenaris +4,57%. Intesa raised the target price from 9,8 to 17,3 euros, confirming the add recommendation. Saipem does better, +5,12%.
Eni +2,49%. The package of measures against high energy costs launched yesterday by the government and which provides for the taxation of 25% of the extra profits from gas and oil does not affect the purchases of the six-legged dog. "The impact could amount to a few hundred million for Eni in the worst case", writes Akros, recalling that the company has guaranteed that the tax will not affect the remuneration policy.
China sends Ferragamo into the red
Luxury suffers, weighed down by the closure of stores in China. Ferragamo (-4,16%) was especially affected by this: Societe Generale cut the Florentine maison's title from "hold" to "sell" pending the strategy of the new CEO, while Banca Akros lowered the target price and confirmed the judgment " neutral". Tod's (-3,8%) and Moncler (-2,10%) were also in the red.
