Home Business Fed «hawk» freezes Europe. In Milan Ftse Mib titles all in red, Tim is saved

Fed «hawk» freezes Europe. In Milan Ftse Mib titles all in red, Tim is saved

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(Il Sole 24 Ore Radiocor) – Abrupt stop at the rally at the beginning of the year for European stock exchanges and sell-off on risky assets: the tone more “hawkish” than expected emerged from the December minutes of the Federal Reserve meeting, together with the dangers of the spread of the Omicron variant, make trigger stock sales. Investors fear the cross effect on economic recovery of increased contagions and restrictions and less central bank aid. Sales are generalized with the FTSE MIB returning below 28 thousand points, and widespread drops for the CAC 40 in Paris, the DAX 40 in Frankfurt, the Ftse 100 in London, the IBEX 35 in Madrid and the AEX in Amsterdam. Sales on tech also weigh on Asian markets, all in red, with Tokyo closing down 2.9%.
Investors fear economic recovery will suffer fromcombined effect of new restrictions due to the spread of the Omicron variant and less support for the central bank economy. The Fed minutes show the forecast of three rate hikes in 2022, but the novelty concerns the rapid reduction of the Fed balance sheet, after the unprecedented expansion that took place during the pandemic that brought the value of the assets held to 8,800 billion dollars. Immediate on sell-off on riskier assets, with Bitcoin falling as low as $ 42,505, the lowest since last December’s ‘flash crash’. Sales also on equities which, however, it should be remembered, are traveling at record levels.

The “hawk” Fed scares the markets

The US central bank has indicated that it could not only raise interest rates sooner than expected, but also reduce holdings in its portfolio in an attempt to tame high inflation. A hypothesis that also provoked a rapid rise in government bond rates, with the 10-year US Treasury at 1.7% as had not been seen since last March. The data on consumer prices will continue to attract attention in Europe today with the German figures (after the + 3.9% shown for December by Istat yesterday in Italy), while for the United States it will be necessary to wait for its own week.

In Milan, Ftse Mib in red slows down Iveco’s race

In Piazza Affari, the entire FTSE MIB is traveling negatively, while still remaining close to the highs in over 13 years reached on January 5, when the main price list has returned to above 28,000 points for the first time since September 12, 2008. Sales at Piazza Affari they are therefore generalized: among the worst Moncler, Interpump Group and Ferrari. Iveco Group slows down the run of the previous two sessions, which had marked a recovery after the thud on the day of the spin-off from CNH Industrial. To a certain extent, the blow was held up by Stellantis, already on the eve of the best, Telecom, waiting for news on the industrial plan and the offer of Kkr, and Intesa Sanpaolo.

BTP / Bund spread trend


Spread up to 140 points

Slightly higher trend for the spread between BTp and Bund. The yield differential between the ten-year Italian benchmark (IT0005436693) and the same German maturity is indicated at 139 basis points from the 137 points of the previous final. More marked increase for the yield of the benchmark ten-year BTp which at start-up stands at 1.29% from 1.24% at the last reference. Meanwhile, the Italian Treasury continues its financing work: on 5 January the placement through a syndicate of banks of a 30-year BTp took place, just like last year, when a 15-year bond was issued on the same day. years. The demand was not long in coming, given that the total requests reached 55.9 billion euros compared to the 7 billion actually assigned.

Euro returns below 1.13 dollars, oil down

The euro / dollar exchange rate returns below 1.13 to 1.129 (from 1.1336 at the end of Wednesday) with the euro / yen at 130.82 (from 131.238). Greenback always close to the highs of 5 years against the yen at 115.87 (from 115.793). Sharp drop in the pound against the dollar to 1.349.
Oil falls back from the highs of the last month, reached after the decisions of OPEC +: to confirm the reduction in production for February. The February WTI is down by 0.66% to 77.34 dollars, while the March Brent is down 0.62% to 80.29 dollars.

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