Home » Stock exchanges today August 26: red lists waiting for Jackson Hole and the Fed

Stock exchanges today August 26: red lists waiting for Jackson Hole and the Fed

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MILANO – 2.30 pm. Equities are moving weak on a day when concerns about the Delta variant of Covid take over, waiting to understand what kind of indications will come from the Federal Reserve, protagonist with the other central banks of the usual late summer meeting in Jackson Hole. A summit more anticipated than ever, because the markets are waiting for light on the moves of Jerome Powell in view of the meeting at the end of September, from which information on the tapering, the gradual reduction of stimuli (ie purchases of securities worth $ 120 billion a month). After the minutes of the July meeting it became clear that the discussion between the American bankers is underway and there are those who expect that the closing of the taps can start already by the end of the year, although Powell has repeatedly recalled how the Fed will be patient before it hikes rates, will let inflation run and that the recovery is not yet fully completed.

Paolo Zangheri, senior economist at Generali Investments, acknowledged in a statement that “expectations for Jackson Hole are very high” but believes that Powell’s speech (scheduled for tomorrow) “will likely lack detail about the reduction in asset purchases of the company. Fed, in light of the persistent risk linked to the increase in Covid cases and persistent economic uncertainties “. That doesn’t change the fact that tapering is upon us: “If the Delta variant doesn’t prove too dangerous, we expect a clear sign of imminent tapering in September, an announcement in November, followed by implementation in December.”

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On the eve of Powell’s speech, however, indications have arrived that invite caution from the real American economy. The US GDP it grew by 6.6% in the second quarter, above the 6.5% initially estimated but below the expectations of analysts, who were betting on a 6.7% increase. On the labor front, however, the new requests for unemployment benefits they have risen by 4 thousand to 353 thousand in the last week, worse than expected.

Even the ECB, in the minutes of the meeting last July, acknowledges the fact that “the spread of the new variants of Covid continues to be one of the main concerns for the global economic recovery and the euro area”. On monetary policy, after the update of the guidelines, the report explains that low rates are not implied for longer: the reformulation “was intended as a set of conditions that should guide the actions of the ECB in pursuing its objective of inflation, as defined in the new strategy “, underline the minutes; this “does not necessarily mean lower interest rates for longer,” the report explains.

Among these arguments, the Vecchio’s price lists move downwards: Milano confirms itself in the red, it loses 0.4% in the early afternoon. Weak too Frankfurt (-0.5%) after the Gfk institute reported the decline in consumer confidence in Germany: the index is expected to weaken in September compared to the previous month due to the increase in Covid cases, the debate on vaccines and inflation. According to data from the research group, consumer confidence should drop to -1.2 points in September from -0.4 points in August. Economists expected a minor decline to -0.8 points. On the German stock exchange it is noted the case of Dws, subsidiary of Deutsche Bank, which pays the rumors of the Wsj on the investigations of the US authorities against him, on the basis of some indications of the former manager of sustainable investments according to which the company has exaggerated the level of use of the ESG criteria (environnemental, social, governance). The other indices of the Old Continent have been added: London loses 0.25%, Paris or 0.26%.

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In the morning, the Asian stock exchanges traded weak, also paying for the rate hike by the Central Bank of South Korea: Hong Kong the stock market of Shanghai yields instead 0.6% and that of Shenzhen 0.9%. While fears of a resurgence of the Covid pandemic in the Asian area increase, the Tokyo closed flat (+ 0.06%).

Among the macroeconomic indications, mixed signs of recovery are coming from France: confidence in the commerce sector is falling, but business confidence is rising. The first indicator marked a fall to 109 points in August, while the second rose from 109 to 110 points against expectations that saw it stable.

After yesterday’s rise, the spread between BTP and Bund is stable at the start of the day. The spread is at 108.5 basis points, the same level as last night’s close. The yield of the Italian 10-year is 0.65%. In the meantime, the Treasury has placed at auction 2.75 billion short-term BTPs with a maturity of 2 years with a rate that is still negative, but slightly up by one point to -0.29%. Also assigned 1 billion indexed BTPs at 5 years with a return of -1.20%.

Little moved trend for theeuro, which amounts to 0.04% against the dollar. The single currency changes hands at 1.1765 against the US currency, while it is recovering against the pound (+ 0.13% at 0.8557). Meanwhile, the Bitcoin still loses ground after Monday’s blaze. The cryptocurrency, which rose above $ 50,000 at the beginning of the week, to its highest since last May, is now moving towards $ 47,000.

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