MILANO – 10:10 am. The lower-than-expected slowdown in US inflation arms the Fed for new rate hikes, perhaps even more aggressive than forecasts. And now the ECB has also come out into the open, with President Lagarde making no secret of a possible intervention on the cost of money next July. Central banks are moving to counter the price rush and the markets are taking note.
Indices traded weak in Asia and European indices fell sharply in the wake of the Wall Street red, with the S & P500 at its lowest in March 2021 and the Nasdaq losing 3%. Milano drops 1.45%, London l’1,8%, Frankfurt 1.5% e Paris 1.5%. The quarterly report of Poste Italiane is recorded on Piazza Affari, which closes the first period of the year with growing revenues and profits but the stock is weak. Snam is also uncertain, which has given the accounts.
In Asia, the broader MSCI index of Asia Pacific equities outside of Japan falls 1%. Tokyo in the end it loses 1.77%, Hong Kong 1.34%. Bucking Shanghaiup to + 0.13% due to the decline in Covid cases and the repeated assurances of the authorities to support the economy after the prolonged lockdowns that paralyzed the area’s economy for weeks.
The US yield curve has flattened: it signals a fear that the Fed’s moves could trigger an economic slowdown in the medium term. In the meantime, however, the outflows of capital to the US where yields become interesting involve some adjustments. In fact, there are interventions around the world for the defense of currencies: it happened to Hong Kongwhere the Monetary Authority tried to lend support to its currency for the first time since 2019. And it happens in Turkey where, reports the Financial Times, the central bank asks commercial banks to limit the purchase of foreign currency by customers.
Among the commodities, the prices of the petrolium are down on the Asian markets, with WTI crude oil futures losing 1.5% to $ 104.11 a barrel and Brent crude futures falling 1.4% to $ 106.04 after the surge in + 6% yesterday. Economic uncertainties and recession fears outweighed supply concerns and geopolitical tensions in Europe.
It still drops spread between BTP and German Bund at 187 basis points, with the Italian ten-year yield at 2.77% on the secondary market.
The cryptocurrency sector is struggling to stabilize, overwhelmed by hours of passion. The Bitcoin it has come down to a 16-month low, thus erasing the 2021 earnings and dropping below the $ 27,000 threshold. In the last eight sessions, calculate the Reuters, eroded a third of its value after it peaked at $ 69,000 last November. A number of factors have stirred the waters in the crypto world. First, high inflation and tight Fed are punishing crypto as well as tech stocks, given the growing correlation between Nasdaq and crypto. The most dramatic is the collapse of TerraUSD which burned 70% of its value in 24 hours. It is an algorithmic stablecoin, which should remain at par with the dollar thanks to a system of equations and trading that regulates the availability of currency in order to keep the price aligned with the greenback. A balance that, however, broke with a roar, which the foundation behind the blockchain was unable to restore and is actually looking for 1.5 billion to try to shore up the situation. The disappointing quarterly report of Coinbase. The largest cryptocurrency exchange platform in the United States closed the first quarter below analysts’ expectations due to a drop in users. Losses amounted to $ 429.7 million on revenues of $ 1.2 billion. What is even more worrying, however, is the communication to the Sec of the company specifying that users of crypto assets have no protection in the event of bankruptcy. In itself there is nothing new given that the lack of safeguards is provided for by the current regulations but just having certified it in writing has triggered panic, suggesting that the clarification was linked to a real risk of bankruptcy for the company. “There is no risk of bankruptcy but we have included a new risk factor based on the requirements of the SEC,” CEO Brian Armstrong had to hurry to explain.