A week full of events that will have an impact on the mood of the markets has begun. Wall Street is back from the best week of the last 4 months with the rally reinvigorated on Friday by the WSJ indiscretion that some members are worried about an excessive rate hike and in the next meeting they will discuss whether to reduce the pace in view of December. Also on Friday, San Francisco Federal Reserve Chairman Mary Daly said it’s time for the Fed to consider slowing the pace of its interest rate hikes.
Piazza Affari also made a big voice in the last few sessions with the Ftse Mib which consolidated above 21,500 points, following the rebound from the lows reached on 13 October in the area of 20,200 points. “The graphic layout has improved but must be confirmed with a closure above 22,000 points”, asserts Pietro Di Lorenzo, professional trader and founder of SOSTrader.
Towards the ECB, here’s what to expect
The highlight of this week will be Thursday 27 October with the ECB meeting. The market expects another hike of 75 basis points, bringing financing costs to their highest levels since the beginning of 2009. Lagarde’s press conference will be closely monitored, especially to capture comments on inflation, but also and above all on issues related to the quantitative tightening, as well as on future rate hikes (ie terminal rate).
Analysts interviewed by Bloomberg see the deposit rate peak at 2.5% in March 2023. The Bce “He must not give up too soon,” Bundesbank President Joachim Nagel said in Washington last week.
“We expect the ECB not to commit to the extent of future increases, to the neutral and terminal rate”, argues today Silvia Ardagna, Chief European Economist Barclays, indicating a gradual deceleration in the rate hike. In the December meeting, Barclays estimates a +50 basis points, followed in February by +25 basis points and another 25 basis points in March, bringing the rate on terminal deposits to 2.5%.
Earning season continues with Apple, in Italy we start with Unicredit
On the same day, October 27, great expectations for US GDP and Apple’s quarterly report. During the week, the quarterly reports of other big Wall Street techs such as Alphabet, Amazon.com and Microsoft will arrive. In general, companies representing 47% of the market capitalization of the S & P500 will publish the results.
In Piazza Affari, on the other hand, it will be the turn of the first quarterly reports among the Milanese blue chips with the numbers of Unicredit (board of directors 25 October, diffusion count on 26 morning) which inaugurates the sreason for bank quarterly reports.
Here are the other quarterly reports on the Ftse Mib: Amplifon ,, Moncler, Italgas, Saipem (26 October) Campari Diasorin, ENI, Inwit, Mediobanca and STM (27 October).