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European stock markets cautious after the rally, US quarterly earnings season kicks off

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European stock markets cautious after the rally, US quarterly earnings season kicks off

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(Il Sole 24 Ore Radiocor) – After five sessions to frame, in which the indices pointed upwards also thanks to the slowdown in inflation in the United States, the European stock exchanges are moving towards a more cautious opening, in the wake of a ‘Asia sluggish (Tokyo -0.09% after the drop in industrial production in Japan). The spotlight remains on central banks: the market is now betting that, after the 25 basis point hike in rates already discounted at the end of July, the Fed will ease monetary policy, while in Europe the ECB minutes confirm that the moves will depend on the data and that Frankfurt stands ready to intervene to break the squeeze, if necessary. This while in Europe we are looking at the Ecofin meeting and, on the other side of the Atlantic, the season of quarterly reports is getting underway with the first major banks (Citigroup, JPMorgan and Wells Fargo expected today). So Milan’s FTSE MIB, which is looking for a sixth consecutive increase, stands just above parity. Paris (CAC 40) and Frankfurt (DAX 30) rose, after the drop in producer prices in Germany (-2.9% on an annual basis, the largest drop since June 2020). Madrid is at parity (IBEX 35), Amsterdam (AEX) is also up and while London is slightly back, while we look at the quarterly results (Burberry saw sales rise by 18% and confirmed its estimates for the year).

The banks are still running in Milan

There are no particularly marked movements on the Ftse Mib: the banks are doing well, at a rapid pace throughout Europe (+0.9% the Euro Stoxx 600 for the sector), with Mps and Bper among the best. Stmicroelectronics is also doing well, up from various sessions and awaiting the results, on which analysts are positive. In line, but with very limited reductions, Enel, Cnh Industrial and Prysmian. Above parity Tenaris on the day in which rival Vallourec anticipated results for the second quarter that exceeded previous expectations.

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Dollar continues weak, euro at the top since February 2022

The weakness of the dollar continues, the euro at its top since February 2022 In terms of currency, the weakness of the greenback continues, with the single currency returning above 1.12 and reaching its highest level since the end of February 2022: the euro is worth 1. 1218 dollars (1.1182 at the previous close) and 154.85 yen (from 154.84). The dollar/yen exchange rate is 138.03.

The euro / dollar exchange


Little moved oil, modest increase in gas

Oil moved little, while we look at a possible fallout on the supply of the turbulence in Libya and Nigeria: the August WTI futures drop 0.18% to 76.75 dollars a barrel, those of September Brent by 0.2% at $81.2. Gas prices are slightly up: August contracts traded in Amsterdam, after having scored a first position at 27.1 euros per megawatt hour, rise by 0.9% to 26.85 euros.

Spread slightly up to 169 points, yield at 4.16%

The spread between BTp and Bund rose slightly. The yield differential between the 10-year benchmark BTP (Isin IT0005518128) and the German security of the same duration scored a first position at 169 basis points, compared to 168 points on the previous day’s closing. There was also a slight increase in the yield on the ten-year benchmark BTP, which in the first few lines stood at 4.16%, compared to 4.27% on the eve of the final.

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