MILANO – European stock markets down in the wake of the weakness already recorded in Asia, which is weighed down by tensions between China and the US due to the visit of the speaker of the House, Nancy Pelosi, to Taiwan while the decline in SME manufacturing indices in Europe and the United States raises concerns for the economy’s resistance to the headwinds of war, the energy crisis and inflation. Milan loses 0.84%. In London the Ftse 100 index drops 0.3% to 7,390 points, in Paris the Cac 40 falls by 0.19% to 6,424 points and in Frankfurt the Dax loses 0.45% to 13,419 points.
Tokyo lost 1.4%, Taiwan 1.6% and Seoul 0.4% while Hong Kong is slipping by 2.2%, Shenzhen by 2.1% and Shanghai by 1.7% in waiting to see if China will follow up on its threats of military intervention. Sydney holds (+ 0.1%) after the Australian central bank, while raising rates to 1.85%, said further tightening will not follow a path already set. Geopolitical tensions also weigh on Wall Street and the European stock exchanges, whose futures are down by about half a percentage point.
Oil has little effect, with Brent remaining below $ 100 and WTI below $ 94 per barrel pending the OPEC + meeting tomorrow. In addition to Taiwan, markets will pay attention to the speeches of Fed members Charles Evans and James Bullard to get indications on the mood on the board of the US central bank on the subject of monetary tightening.
Treasuries in calo
The geopolitical tensions between the US and China caused by the visit of the president of the American House, Nancy Pelosi, who arrived in Malaysia and should also visit Taiwan, weigh on the markets and also on the performance of American treasuries. The 10-year bond yield is down 9 basis points to 2.5160%, a four-month low. US data on manufacturing and construction also showed a slowdown that could push the Fed to downsize its monetary policy actions to push down treasury yields.