The Fed shuts down stocks and turns on the dollar
European stocks fall after the words of the governor of the Fed, Jerome Powell, who announced a more aggressive monetary policy than expected. Piazza Affari closed the session down by 0.67%, Paris by 0.46%, Frankfurt by 0.61%, London by 0.13%, Madrid by 1% and Amsterdam by 1.09%.
Powell’s words weigh heavily
In a hearing before the US Senate Banking Committee, Powell explained that the peak in rates will be “probably higher than expected”. He added that the Fed is “ready to accelerate” by further raising the cost of borrowing. Provided, however, that economic conditions allow it. So now investors are expecting an increase not from 25 points, but from 50 points starting from the March 21-22 meeting.
The market reaction was immediate
In the wake of the US governor’s words, not only the stock indexes turned red, but also the greenback strengthened against the main currencies: the euro fell below 1.06 dollars to a minimum of 1.057, and the pound dropped to $1.1883, the lowest in two months.
Oil is also down with the Wti losing 2.6% and Brent 2.2%, while the spread went back up to 184 points, against 180 in the previous hours and 182 yesterday.
Ups and downs on the Milanese price list
Nexi declined in Piazza Affari which, having run out of momentum after the accounts were in line with expectations, closed -3.07%. (-0.7%) Down also Diasorin (-0.67%) and Ferrari At the bottom of the list Saipem (-3.38%) and at the top Unipol (+0.91%) and Moncler (+1.06%). Positive for Banca Mediolanum (+0.11%) after the record collection data in February.
On the energy front, in the last few minutes, gas has risen from the lows of December 2021 to 43.44 euros per MWh (+3.06%), however remaining at the values of January 2022.