MILANO – A weak day is expected for the European stock exchanges, which start trading with a minus sign.
After a very positive phase, the investors in these sessions still at half service for the August period weigh the risks of recession, the fears of hard monetary tightening to fight inflation, the worries for a winter at risk due to the gas crisis . Among the data of the day, the difficult moment that the British population is going through – between strikes and expensive energy – emerges clearly and everything pours into the confidence indexes of the United Kingdom, which reach a minimum. The Gfk indicator fell 3 points to -44 in August, the lowest point since the time series began in 1974. It was blowing in the air of oil shocks. All the different components went negative, with those concerning the outlook for personal finances recording the greatest backlash. The analysts’ expectations were disappointing, aiming for a stable situation at -41 points in July. On the other hand, UK inflation hit 10.1%, a new 40-year high and the highest rate among the G7 economies. “Given the headlines of record inflation eroding household spending power, the pressure on many people’s personal finances is alarming,” said Joe Staton, Gfk’s head of client strategy, commenting on the data.
In the meantime, gas prices on the Amsterdam market are settling down after the rises on the eve of the day.
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Opening in red for EU stock exchanges. Rising spread
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Producer prices, boom in Germany
Asia, mixed closure. Hong Kong flat and Shanghai in red
Mixed session close for Asian stock exchanges, after a flat conclusion for Tokyo’s Nikkei. Hong Kong’s Hang Seng held above parity of 0.046% at 19,773.03 points, while the Shanghai Composite lost 0.59% to 3,258.08 points and the Shenzhen Component 1.27% to 12,358. , 55 points. Seoul’s Kospi also fell, falling by 0.61% to 2,492.69 points.
Salvini in favor of a tax on extra-profits, utilities in the crosshairs
Utility in the spotlight on Piazza Affari after the leader of the League, Matteo Salvini, stressed that the government, to intervene on expensive energy, can act on public groups or local municipalities by imposing a ceiling on extra profits. The executive, he added, could also ask utilities to keep energy bills under control. The current government, moreover, has already proposed to extend the cap on renewable energy prices to the first half of 2023 and announced careful checks on companies that will not pay contributions on extra profits by August. “In the first half of the year, the results of the utilities did not show significant improvements, but on the contrary the retail energy sector suffered heavily from the asymmetry of fixed price contracts”, underline Equita analysts. “The risk for retailers (Enel and local utilities) in the coming months will be the control of working capital and the trend of non-performing loans due to high gas prices”, add the experts.
In Piazza Affari, Enel sells 0.81%, A2a 0.94%, Hera 0.73% and Iren 0.4%.
Bitcoin at three-week lows
Sharp drop for the prices of the main cryptocurrencies. Bitcoin fell 7.7% to $ 21,404, hitting a three-week low before recovering in part to $ 22,047. Ether is also down, losing 5% to $ 1,753.
Gas, the price settles just under 240 euros
Gas prices are settling in Europe after the new closing high reached yesterday on the Ttf platform in Amsterdam at 241 euros per megawatt hour. The reference contract now yields 1.7% to 237 euros.
Opening in red for EU stock exchanges. Rising spread
Difficult opening for European equities. The data on the decline in consumption in England and above all the boom in German producer prices are penalizing the main markets. Black jersey for the Dax of Frankfurt which at the opening of trading lost 0.74% to 13,597.32 points. All the other main European markets are also bad: Cac40 in Paris at -0.52% at 6,523.76 points, Ftse Mib at -0.30% at 22,916.00 points, Ftse 100 at -0.27% at 7,523.50 points points.
The words of St. Louis Fed chairman James Bullard that another 75 basis point rate hike is necessary in September cast water on the fire of hopes of investors who were betting on a slowdown in monetary policy tightening and penalize the trend of the European stock exchanges. Especially since a new alarm has come from German producer prices, which rose much more than expected in July due to expensive energy. On the other hand, the number one of the Kansans City Fed, Esther George, was more cautious. While confirming the need for new rate hikes, she stressed that the pace of the tightening has yet to be decided.
The tensions are discharged in a flare-up of the yields of the entire sector of sovereign bonds of the Eurozone. At the start of the session, the spread between BTP and Bund widens: it goes to 225 basis points from the 222 basis points of yesterday’s final. The yield on Italian bonds rose to 3.42% from 3.32% recorded at yesterday’s closing. The yield on the Bund also continues to rise, returning well above 1% which is trading today at 1.17% from 1.09% of the last reference yesterday.
Producer prices, boom in Germany
Producer prices in Germany in July were much higher than analysts’ estimates: the index rose by 5.3% compared to the previous month, against a forecast increase of 0.6%. In June, the cyclical growth was 0.6%.
Retail sales in Great Britain + 0.3% in July: better than expected
Retail sales in England grew by 0.3% in July. A figure that surprised analysts who expected a confirmation of the 0.2% decline, as emerged in June.
But the effects of inflation and generalized increases are felt annually. After the -6.1% of the previous figure, the slowdown in consumption continues with another -3.4% per year, a figure slightly higher than the expectations of analysts who estimated it at -3.3%.
Oil slows after the rally on the eve
Oil slows after yesterday’s rally. On the energy markets, US benchmark WTI crude oil lost 24 cents to $ 90.26 a barrel on the New York Mercantile Exchange. Brent crude, the basis of prices for international trade, fell by 30 cents to 96.29 a barrel in London. Yesterday it jumped $ 2.94 to $ 96.59.
Wall Street, weak prospects for the day
A difficult day is expected for American equities. Wall Street futures all appear weak and in negative territory for the time being. At the moment the futures on the Dow Jones are quoted at -0.19%, those on the S&P 500 at -0.23% and those on the technology list, Nasdaq, at -0.02%.
The uncertainties related to the health of the American economy and the Fed’s next moves made yesterday a difficult day, even if all the main indices managed to recover towards the end of the sessions, taking, albeit slightly, into positive territory. . Indeed, the S & P500 gained 0.2% last night.
Mixed futures, euro little moved on the dollar
A mixed opening is expected for the European stock exchanges. After yesterday’s positive closing with Milan as the best place in the old continent, futures on the Euro Stoxx are now traveling with a drop of 0.24%. Negative also those on the Dax at -0.37%. In contrast, however, London sees the Ftse 100 advance by 0.14%.
The euro is little moved at the opening of trade. The single currency is currently losing 0.07% of its value against the dollar to 1.007. On the other hand, there was a slight appreciation on the yen, trading at + 0.15% and 137.24. On the other hand, the greenback, considered a sort of safe haven, grew on the recent fears of recession. At the start of the day, the dollar gained 0.22 against the yen at 136.16.
Inflation in Japan rises, the Tokyo Stock Exchange closes lower
The Tokyo Stock Exchange concludes trading with a slight retreat to -0.07% at 28,921.50 points. All the other main Asian lists were also negative. The Nikkei was weighed down by the increase in Japanese inflation to 2.4%, a record level not recorded since 2014.
This is the “core” figure, in line with expectations. The general data shows an increase of 0.4% monthly and 2.6% annually (from 2.4% in the previous month). For the fourth consecutive month, Japanese ‘core’ inflation thus exceeds 2%, target of the Bank of Japan (BoJ), and continues to accelerate after hitting 2.1% in April and May and then 2.2% in June.
It is also a maximum since August 2008 if we exclude a period of soaring inflation in Japan in 2014-2015 that was artificially caused by a VAT increase. Also excluding energy prices, consumer prices increased by only 1.2% in July, compared to 1% in June, according to data from the Ministry of the Interior.