MILANO – More than the war in Ukraine and the wait for the definition of the new international sanctions package against Moscow, the markets are now looking to the Federal Reserve and worry about the indications of an acceleration in monetary tightening after the years of expansionary fiscal policy . Milano starts trading down 0.2%: the auto sector suffers. London slips 0.2%, Frankfurt 0.3% e Paris 0.4%.
Jeffrey Halley, an analyst at Oanda, in his morning note from the Asian market remarked that the night session was dominated by comments from Lael Brainard“who put the cat among the pigeons of the stock and bond markets with some very ‘hawkish’ statements. Ms Brainard – recalls the analyst – suggested that a reduction in the Federal Reserve’s balance sheet, quantitative tightening, it could start as early as next month and at a much faster pace than previous efforts. Additionally, Ms Brainard suggested that the 0.50% increase (in rates, ed) is on the table as the Fed is poised to take “strong action” to contain inflationary pressures. “According to Halley,” what makes the comments so significant is that Ms. Brainard is typically one of the more dovish members of the committee. monetary policy of the Fed, which is usually a “dove.” “If it has moved into the hawkish camp, then the markets have to take notice and they did. Equity markets moved sharply downwards while US yields across the curve, especially on the long side, rose significantly. “Today, from the minutes of the last meeting (the one in March that raised rates by 0.25 %), observers expect some more indications.
In fact, Treasury yields have moved above 2.6%, the highest since 2019 second Bloomberg, while the dollar strength index has reached a three-week high and futures on European exchanges are negative. Asian markets moved lower on the back of the morning Wall Street: Shanghai lost 0.2% e Tokyo it fell by 1.58%. Hong Kong is also weak at -1.4%. Last night the US stock market closed lower (-1.26% for the S & P500). Twitter remained in the spotlight after Musk joined the board, changing the qualification of his share of over 9% in the social network from “passive” to “active”.
It spread between ten-year BTPs and German Bund counterparts opens at 162 points, down from 164 points at yesterday’s close. The yield on Italian bonds stood at 2.24%.
The energy sector remains special observed in the midst of the definition of the new Western sanctions against Russia. Yesterday the European Commission proposed the fifth package that includes coal, while the US is preparing to ban investments in the country. Meanwhile, the American chip giant Intel Corp has announced the immediate termination of all its operations in Russia. The Petroleum it rose slightly at the start of the day: WTI crude oil changed hands at $ 102.3 a barrel, an increase of 0.36% compared to the values of last night in New York. Brent rose to 107.23 dollars, an increase of 0.48%.
Among other commodities, prices oforo down on the Asian markets. The bar with immediate delivery changes hands at $ 1,918 per ounce (-0.24%).
As for the marco data, activity in the Chinese services sector contracted in March at the fastest pace in the past two years, affected by the resurgence of the Covid-19 epidemic in some key areas of the country. This is evidenced by the SME caixin index for the services sector which in March fell to 42 points from 50.2 in February, falling below the threshold of 50 points that separates growth from economic contraction. The reading points to the sharpest decline in activity since the start of the pandemic in February 2020. Weak indications also from Germany, where industrial orders drop by 2.2% monthly in February after a three-month increase.