(Il Sole 24 Ore Radiocor) – Inflation prospects and central bank moves on both sides of the Atlantic remain the focus of European equity markets, which start the session just below parity. On Monday the president of the ECB, Christine Lagarde, left little hope for investors, stressing that there are “no clear signs” that inflation has “peaked”, while weak macroeconomic data released in the US allow markets to return to betting on a pause in the bull cycle Fed. Fed Funds futures now view maintaining the status quo at next week’s summit as 78% likely. Meanwhile, the Australian central bank raised rates by 25 basis points and indicated possible further increases in the future.
In the first few bars, therefore, the FTSE MIB of Milan, the CAC 40 of Paris, the DAX 30 of Frankfurt, the AEX of Amsterdam and the IBEX 35 of Madrid move below parity.
Bank risk is back in the spotlight
Among the main titles, Banca Mps remains in the spotlight, while hypotheses of extraordinary operations are coming: this time Repubblica would have identified the “white knight” in Bper. Focus also on Pirelli & C, awaiting news on Golden Power, and Raiway, with the return of the merger hypothesis with Eitowers. On the foreign exchange market, the euro consolidates its positions at 1.0727 dollars (from 1.0713 at yesterday’s close). The single currency is also worth 149.55 yen (149.60), while the dollar/yen ratio is 139.42 (139.63). The price of oil is losing share: the July future on Wti marks -0.68% to 71.66 dollars a barrel, while the August delivery on Brent slips by 0.46% to 76.36 dollars. The price of natural gas rises again in Amsterdam: the July future marks +3.9% at 29.65 euros after exceeding the 30 euro mark (top at 30.5) for the first time in two weeks with the start of the counter-offensive Ukraine.
Tokyo closes higher, Nikkei hits highest since 1990
The Tokyo Stock Exchange closed higher with the Nikkei Index updating its new highs since July 1990. Exchanges benefited from the good tone of the banking and manufacturing sectors which took advantage of Wall Street’s gains after the last round of US economic data and increasingly positive economic prospects for the Japanese economy. At the end of the session, the Indie Nikkei gained 0.9% to close at 32,506.78 points. The broader Topix index also performed well, finishing with a gain of 0.74% at 2,236.28 points.
The Australian central bank raises rates
Australia’s central bank raised interest rates by a quarter of a point to an 11-year high and warned that further tightening may be needed to ensure inflation returns to target. At the end of its June policy meeting, the Reserve Bank of Australia (RBA) raised its liquidity rate to 4.1%, saying inflation is still too high and it wants to prevent high price expectations from becoming entrenched. Markets had steered towards a pause, although they had forecast a 40% chance that the RBA would rise by 25 basis points.