(Il Sole 24 Ore Radiocor) – European stock exchanges start modestly up, following the lead of the main Asian markets (+ 1.1% Tokyo, + 3.3% Hong Kong, + 0.7% Seoul) which are supported by the Chinese central bank’s decision to lower the rates on some loan maturities to support the economic recovery. The data on Japanese exports for the month of December also performed well (+ 17.5% and above expectations). On the US-China relations front, however, the statements by President Biden according to which the conditions for removing the trade tariffs to Beijing introduced by his predecessor are not yet in place.
That said, rising government bond yields in Europe and the United States are still driving the indices: pending December Eurozone inflation and producer prices in Germany, government bond yields may fall back. pressure and with them the bags.
The knot of rates
The rise in government bond yields has been weighing on the stock exchanges for days. On Wednesday, the 10-year Bund rate returned slightly above zero (which it had not seen since 2019) while the 10-year and 2-year Treasury yields remain at pre-pandemic levels. This rise in government bond rates, due precisely to the flare-up of inflation and the expectation of a decisive monetary tightening in the United States, is penalizing the stock exchanges. Especially technology stocks, given that the rise in interest rates devalues the discounting of their future profits: for this reason, since the beginning of the year, tech stocks have lost 6.16% in Europe and around 7% in America. On the other hand, the increase in rates benefits banks (which in fact have gained 1.65% on Wall Street and 8.36% in Europe since the beginning of the year) and various so-called “value” or “old” sectors. economy “. Even today, eyes will therefore be focused on the trend in market rates.
Euro / dollar stable, oil slows
On the currency market, the exchange rate between the euro and the dollar remains stable at 1.1357. The price of oil slows down and in London returns to slightly move away from 90 dollars: the barrel expiring in March is trading at 88.2 dollars for Brent. The March WTI drops to $ 85.69 a barrel. Gas prices down in Europe to 72.9 euros per megawatt hour.
The appointments
In this context, the many macroeconomic indicators that will be published during the day will also be carefully watched. It starts with Germany, which is spreading its December producer prices. It continues with France, which publishes the data on the confidence of manufacturing companies. Istat will then publish the data on construction production in November. But the highlight comes at 11, with the Eurozone inflation data in December. From the United States will then come the weekly claims for unemployment benefits, the Philadelphia Fed Index for January and the data on existing home sales.