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(Il Sole 24 Ore Radiocor) – After a balanced start the European stock exchanges close the first session of the week, which sees the start of the work of the World Economic Conference in Davos at the center, in negative with the FTSE MIB which closes below par; Paris is the worst European market (CAC 40), not far from Frankfurt (DAX 40). On the macro front, according to the numbers presented by the national statistics office Destatis, the German economy ended up in recession with GDP falling by 0.3% in 2023, a clear trend reversal compared to the +1.8% in 2022. The data, according to observers, is alarming because there is a risk that it could reverberate on the economic performance of the entire Old Continent; Nonetheless, it could portend a more accommodating attitude from the ECB on future rate cuts. Added to this is the closure of Wall Street for the Martin Luther King Day holiday.
Sales on banks, Saipem in the queue
At Piazza Affari, sales in the banking sector (Banca Mps, Bpm Bank) come on Saipem after the administrative proceedings in Brazil. In red too A2a): the Municipality of Milan has opened up the possibility of selling part of the public share held in the company. Leading the Ftse Mib Bank of Milanfollowed by Inwit e Italgas.
China’s central bank leaves rates on hold and injects liquidity
The Chinese Central Bank unexpectedly kept key rates unchanged. Major commercial banks have lowered deposit rates, a move seen as a way to leave room for further rate cuts. The People’s Bank of China injected 995 billion yuan ($138.93 billion) of liquidity into the banking system through the one-year medium-term lending facility at an interest rate of 2.5%, the same rate as previous operation; it also injected 89 billion yuan through seven-day reverse repurchase agreements at a rate of 1.8%. The move to hold key rates could disappoint the market, which has been anticipating a rate cut this month, after commercial banks cut deposit rates last month to give the central bank more room to maneuver.
Spread down to 155 points, yield up to 3.78%
Second part of the session was negative for the prices of government bonds traded on the Mts electronic secondary market. The decline in prices, however, produced a slight closing of the spread between BTps and Bunds. In the final, the yield differential between the benchmark ten-year BTp (Isin IT0005560948) and the German equivalent maturity stood at 155 basis points, from 156 points at the start this morning (158 points at Friday’s closing). The drop in prices produced a rise in yields, with the Italian ten-year bond indicated at the end at 3.78% (3.77% at the start and 3.72% at last Friday’s close).
Gas falls to its lowest level since August, then climbs back to 30 euros
The price of natural gas falls below the threshold of 30 euros per megawatt hour: the last time was 8 August 2023, when the price opened at 29.81 euros per megawatt hour. The contracts exchanged in Amsterdam expiring in February, after having fallen during the day to 29.6 euros per megawatt hour, lost 6% and rose to 30 euros. Natural gas sales depend on expectations of a rise in temperatures next week in both Europe and the US, in a context of still high inventories: in Europe they are now 79.72% full, according to the industrial group Gas Infrastructure Europe.