MILANO – 3 pm The specter of rising inflation continues to disturb the moods of the markets. European stocks traded lower in the morning – after Wall Street closed in red yesterday on the back of higher-than-expected April price hikes – but recovered from lows in the early afternoon. Investors are worried that overheating inflation could push central banks to reduce their monetary stimulus, a scenario that the market would like to avoid in every way. Fears that have already been seen in Asian exchanges, where Tokyo closed the session with a heavy -2.49%.
The EU indices rise slightly, thanks to the good pitch of US futures: Milano drops 0.36% after exceeding -2%, London l’1,4%, Frankfurt 0.5% e Paris 0.4%. As a note Bloomberg, global equities soared to a six-week low. At Piazza Affari the spotlight is still on the quarterly reports: Atlantia, Prysmian and Unipol are among the big players today.
Other signs of recovery came from the US today, with the number of new applications for weekly unemployment benefits down to 473,000 from 566,000 the previous week (revised up from the initial 498,000). Analysts had expected a more modest decline to 490,000 units. The data on producer prices, which rose by 0.6% in April against estimates of + 0.3%, was higher than expected.
Among the currencies, the euro opens below 1.21 dollars and changes hands at 1.2078 dollars and 132.47 yen while the dollar / yen exchange rate rises to 109.48. The Treasury held the auction of BTP with the fifth tranche of the 3-year bond maturing 15/04/2024 for 3 billion against a request of 4.228 billion. The yield rose by 11 cents to -0.06%. The first tranche of the new 7-year BTP benchmark maturing 15/07/2028 was also placed: against requests for 6,080 billion the amount issued was equal to 4.5 billion while the yield stood at 0.69%. Finally, the fourth tranche of the 30-year BTP expiring on 01/09/2051 was assigned for 1.75 billion against a total demand of 2.269 billion and achieved a gross yield of 2.06%. The auction regulation falls on May 17th.
The spread between BTP and German Bund rises to 119 basis points with the 10-year yield at 1.09%.
On the commodities front, the start of the day was down for the Petroleum. The WTI with delivery in June drops 1% to 65.40 dollars a barrel. Brent with delivery in July fell 1% in London to 68.62 dollars a barrel.
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