MILANO – Stock market sell-off extended overnight in Asia, but futures on Europe and US indicate an attempt to rebound after the S & P500 combined a 9% slump in three sessions, falling more than 20% from the peaks of January and thus officially entering the “bear” phase.
Stock markets down, BTPs under attack, the ECB corrects its rates and prepares the anti-spread challenge
by Tonia Mastrobuoni
Investors are concerned that central banks’ squeeze to fight inflation could bring a fatal blow to growth: this is what it testifies the inversion of the US yield curve, with two-year bonds yielding more than ten years for a few moments on Monday, representing a “risk of recession”. Morgan Stanley CEO James Gorman said he saw a danger of a US recession on the order of 50%. The focus is now on the Fed, which will make its rate decisions tomorrow. At the May meeting, Governor Powell had made it clear that the hikes would be 50 basis points in May and June, if macroeconomic data were confirmed as expected. But last week’s inflation (8.6% in May) beat them and now the market has raised its bet to a 75 basis point hike – it would be the strongest since 1994.
In the morning, the Tokyo Stock Exchange extended losses in the wake of US equity markets: the Nikkei fell 1.32% to 26,629.86, with a loss of nearly 400 points. On the currency front, the yen is trading near its 23-year low against the dollar, at 134.60, and also weakens against the euro at 140.40. Shanghai the index fell 0.49% Shenzhen moves back by 2.12%, Hong Kong 0.25% while Only 0.58%.
Among the macro data of the day it should be noted that in May theinflation in Germany accelerated, on a trend basis, to 7.9% from 7.4% in April, in line with expectations. This was announced by the German statistical office, adding that on a monthly basis there was an acceleration to 0.9% from 0.8% in April.
Slight relaxation for the spread between BTP and Bund which, according to data from the Bloomberg platform, starts the session down to 235 basis points, compared to 238 at yesterday’s closing. The yield of the Italian ten-year falls below 4% (3.96%), compared to the day before.
The collapse of the Bitcoin which still loses ground after yesterday’s debacle and in Asia retreats up to 10% slipping below $ 21,000 to $ 20,824. Then the slight recovery that brought the main cryptocurrency to $ 21,899.
Among the commodities, the prices of the Petroleum they are stable on the Asian markets after yesterday’s swing. Fears that demand will be affected by a possible recession and the Covid situation in China have curbed the rises. WTI futures rose 0.14% to $ 120.8 a barrel, Brent futures rose 0.11% to $ 122.14. “The discussion revolves around the decline of production in Libya, the measures that China continues to impose to slow the spread of Covid and concerns about the global recession leading to the destruction of demand,” said Stephen Innes, of Spi Asset Management. . In China, there was a Covid outbreak in a Beijing bar that raised fears of a new lockdown phase just as restrictions began to ease and demand strengthened. Yesterday, the most populous district of the Chinese capital, Chaoyang, began a three-day mass testing campaign among its approximately 3.5 million residents.