MILANO – Weak day for Asian stock exchanges and, in perspective, for Western trade in the aftermath of the jump in US inflation. The unstoppable run in US prices, + 5.4% annually in June, has rekindled the debate among operators on how the Federal Reserve should behave: until now, the American Central Bank has made it clear that it considers the flare-up in prices a temporary factor and, having recently changed its strategy, it will be tolerant of accepting a phase of high inflation until the recovery has consolidated, including on the labor market. But the most recent data, coupled with fears that the oil rush will fuel further hikes, has fueled the debate among traders over whether the Fed can reduce stimulus sooner than expected to avoid price overheating. It will be crucial to hear what Governor Powell will say about this in Parliament hearings today and tomorrow.
Investors are also disturbed by the news of the restart of the infections, with the relative increase in security measures by many countries. Argument which is also debated in Italy. Futures on European stock exchanges and on Wall Street are therefore falling.
Last night, the American market closed weak after an initial positive moment in which the indices had recorded new records: at the end of the session, however, the Dow Jones lost 0.3% and the Nasdaq 0.38%.
This morning, Tokyo it fell by 0.23%, Shanghai lost 0.46%, Hong Kong 0.25% and Seoul 0.21%. In Japan, the May industrial production figure was revised downwards, which was set at -6.5% on a monthly basis.
Waiting for Powell’s words (and the Fed’s Beige Book is also on the agenda today),euro opens slightly below 1.18 dollars. The single currency changes hands for 1.1785 dollars and 130.27 yen. Dollar / yen at 110.53. To be registered consumer prices in Great Britain: in June they increased by 0.5% compared to the previous month of May. On a trend basis, compared to June 2020, the increase was 2.5 percent. As for government bonds, it returns to the 100 point threshold spread between BTP and German Bund at the opening of the day. The yield of the Italian ten-year is equal to 0.72%.
Fears about the global recovery, marked by the Delta variant, also weigh on the prices of Petroleum which dropped on the Asian markets: the drop in crude oil imports in the first half of China also played against prices. The WTI drops 0.21% to $ 75.08 per barrel and Brent falls 0.18% to $ 76.36 per barrel. Yesterday, after a day on parity, crude oil prices ended trading higher helped by reduced supply due to the stall at OPEC + and expectations of a further decline in Api (American Petroleum Institute) crude stocks in the United States . A dispute between Saudi Arabia and the UAE forced OPEC + to abandon talks last week to increase production after days of negotiations. While the rise in Covid cases in some countries remains a key risk, the IEA has reported that oil storage levels in most developed countries have fallen well below historical averages and stock draws. next autumn, it is destined to be the most consistent for at least a decade.
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