MILANO – Between the Italian political crisis and the expectations for the ECB’s moves (scheduled for tomorrow), the financial markets face with an unusual verve a double crucial junction for the trajectory that the indicators will take in the coming times. International attention is focused on the Roman classrooms, where the prime minister, Mario Draghi, gave his speech urging the parties to rebuild the pact of trust that the Italians are asking for. The spread, the thermometer of investors’ tension towards Italy, welcomes his words and falls below 200 basis points, from over 210 at last night’s closing. The stock markets slowed down, after the positive opening.
Great expectations also for the ECB, which tomorrow will reveal the extent of the first rate hike after a decade and some more details on the anti-spread shield. In the last few hours, the hypothesis has emerged that Lagarde could launch a rate hike of 50 points, more accelerated than forecasts, and this gives support to the euro.
Asian stocks moved up well after last night’s rally on Wall Street, with Tokyo closing 2.7% positive.
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Tokyo closes up strongly: + 2.7%
EU stock exchanges cautiously rise
European stock exchanges reduce earnings but remain positive in mid-morning. The Cac 40 in Paris now slows down at + 0.30% (after the opening at + 0.65%) to 6,223.25 points, the Dax 30 in Frankfurt rises by 0.21 to 13,321.43 points and the London’s Ftse 100 of 0.49 to 7,338.35 points. The Ftse Mib in Piazza Affari, after making its debut with a + 0.35% and falling to -0.60%, then recovered on the words of Mario Draghi and now earns 0.63 to 21,824 points.
The spread below 200 points after Draghi’s words
The differential between German BTPs and ten-year Bunds fell below 194 points during the speech in the Senate by Prime Minister Mario Draghi who affirmed the need to “continue this confrontation and define a shared perspective” in view of the budget law. The spread rose to 193.9 points, with the Italian annual yield down by 14.1 basis points to 3.173%.
In the rest of Europe, the decline in yields is around 6 basis points on average.
The EU stock exchanges open higher
European stock exchanges open higher, in the wake of the rally on Wall Street, awaiting the meeting of the ECB, which will raise interest rates tomorrow for the first time in over a decade. Quarterly results from US companies offered a respite for investors worried about rising inflation and Federal Reserve rate hikes. Expectations of a resumption of Russian gas supplies to Europe have helped to lift market sentiment and mitigate fears of a recession.
The Cac 40 index in Paris rises in early trading by 0.65% to 6,241.26 points, the dax 30 in Frankfurt advances by 0.54% to 13,380.13 points and the Ftse 100 in London records a progress of 0 , 62% at 7,340.34 points. The Ftse Mib in Piazza Affari made its debut with a + 0.35% at 21,770 points on the day of Mario Draghi’s communications.
The spread drops on Draghi’s day
Opening lower due to the differential between Italian BTPs and German ten-year Bunds which fell to 199.6 points against 204 at yesterday’s closing. The Italian annual yield fell by 6.2 basis points to 3.251%, against an average decline of 2 points for similar European stocks.
Oil down
Oil prices are falling on the markets due to the increase in US inventories (2 billion barrels more last week) and the weakness of the dollar. Texas WTI crude oil thus changed hands at $ 103 a barrel (-1.17%), after an initial drop below 100 in early trading in London. The North Sea Brent marks a decrease of 1.11% to 106 dollars.
WeBuild, 223 million order on US highways
Webuild has been awarded a $ 223 million (€ 212 million) highway contract in Florida (USA) through its American subsidiary Lane. The project – explains the Group in a note – involves the design and implementation of interventions to improve traffic flows and safety of the I-275 / I-4 Downtown Interchange motorway section, which already today transit 200,000 vehicles per day. “The new contract – continues Webuild – strengthens the Group’s presence in Florida, confirming North America as a strategic market, which generated 21% of consolidated revenues in 2021 and offers interesting development opportunities for the infrastructure sector”.
Wall Street, closed with a strong rise last night
Wall Street closed the session on Tuesday 19 July with a marked rise. Investors are looking to the quarterly with optimism and are pointing to the fact that the market has already hit bottom and that from now on it is destined to recover some of the ground lost due to recent fears about high inflation, geopolitical tensions and the weakening of consumer confidence. So far, according to data provided by Factset, about 9% of companies listed on the s & p 500 have published results for the second quarter of 2022 and, of these, about two thirds have exceeded analysts’ expectations. The S&P 500 gained 7.4% from the lows reached on June 16. A fall in the dollar also helped the rally. The euro strengthened ahead of the European Central Bank’s decisions after hitting parity with the greenback last week and gained 0.8% to $ 1.0227. The Dow Jones added 754.44 points (+ 2.43%), the S&P 500 rose 105.84 points (+ 2.76%), the Nasdaq composite closed up 353.10 points (+3). , 11%).
Producer prices in Germany less strong than expected
Producer prices up less than estimates in Germany in June. The monthly index marks a rise of 0.6% against the expected + 1.3% and + 1.6% recorded in May. On an annual basis, the progress is 32.7% against the + 33.9% expected and the + 33.6% recorded in the previous month.
Inflation accelerates in the UK in June: + 9.4%
The UK consumer price index in June rose 0.8% from May, when it grew 0.4%, and grew 9.4% annually, accelerating from 9.1% in the year. previous month, according to data released by the national statistical office. The June figure is the highest annual CPI inflation rate in the national statistics series, which began in January 1997.
Tokyo closes up strongly: + 2.7%
Strong upside for the Tokyo stock exchange. In recent exchanges, the Nikkei index recorded a + 2.67% at 27,680.26 points.
A strong rally driven by the Wall Street rally kicked off on the wave of solid US corporate earnings: a lull at a time when investors are keeping their eyes on uncertainties related to gas supplies, rising inflation and rising equity prices. Fed rates.
The ECB studies a strengthened rate hike and supports the euro
Markets start slightly higher for the euro after yesterday, Tuesday, it hit the highs of the last two weeks. The single currency is trading at $ 1.0236 (+ 0.08%) with the market looking to the ECB meeting tomorrow, Thursday. In the last few hours, the hypothesis of a more consistent rate increase, equal to 50 basis points, has taken hold. A scenario that allowed the euro to regain ground, which fell to par with the dollar precisely because of the expectations of a less ‘aggressive’ ECB than the US Federal Reserve. In Asia, the yen remains at 138 dollars.