(Il Sole 24 Ore Radiocor) – After the rises on the eve of the eve, the European stock exchanges begin another positive session, in the wake of Wall Street and Asia, after the testimony of the President of the Federal Reserve, Jerome Powell, in the Senate and awaiting the data on American inflation, in calendar in the afternoon. Thus the FTSE MIB in Milan, the CAC 40 in Paris, the DAX 40 in Frankfurt, the IBEX 35 in Madrid, the Ftse 100 in London and the AEX in Amsterdam are all up. Wall Street rebounded on Tuesday, with Nasdaq in the lead, after Powell confirmed three rate hikes this year, as expected. The fact that the tone of the Fed number one was no more aggressive than expected set the tone for the recovery of tech stocks, penalized in recent sessions. The focus today is on consumer price numbers, with expectations for a trend of 7%, after 6.8% in November.
The Fed and the markets
The Federal Reserve should initiate a policy of countering the rise in prices. Yesterday in the US Senate Jerome Powell, President of the Fed, reiterated that they are expected three interest rate hikes in the course of 2022, which could be more if inflation persists, but also that we are in a historical phase of low rates. Minutes from the latest meeting revealed that the US central bank could also reduce the amount of government bonds and bonds bought with fresh money placed on the market to combat the economic crisis. The fast backtracking from the expansionary moves worries investors, who are showing themselves particularly humoral in this first phase of 2022.
Tokyo closes at + 1.92% in the wake of Wall Street
Closing in sharp rise for the Tokyo Stock Exchange which interrupts the series of three consecutive negative sessions taking advantage of the good tone of Wall Street following the monetary policy indications arrived yesterday from the Fed. At the end of the session, the Nikkei Index recorded a rise in the 1.92%, at 28,765.66 points. The broader Topix Index also performed well, gaining 1.64% to 2,019.36 points.
Yields jump, Bund almost to zero
The expectation scenario for a financial tightening fuels bond sales and pushes bond yields higher on the secondary market: on Monday, the 10-year US Treasury hit 1.8%, a level abandoned in January 2020, before the pandemic. The Bund rate approached 0 (-0.03%) and the BTp rate jumped to 1.39%.