MILANO – The markets are hanging on to the decisions of the Federal Reservewhile the Bce he meets in an unscheduled meeting to take stock of the tough reaction of the markets to the latest announcements on the end of extraordinary purchases of securities and on the rate hikes that will start at the end of July.
From the US central bank it is expected (in the Italian evening) that the cost of money will rise by at least half a percentage point, although in recent times – especially after the reading of the higher-than-expected inflation in May, which emerged last week – bets have increased on a move by 0.75 points: it would be the strongest since 1994. Also on this side of the Atlantic Ocean, the headlights remain focused on European Central Bank. “The Governing council will hold an ad-hoc meeting on Wednesday morning to discuss the current market situation,” a Eurotower spokesperson said.
The extraordinary meeting comes in the aftermath of a day in which German Bund yields reached 1.77%, the highest level since the beginning of 2014, while the spread with Italian BTPs reached 250 points base. Yesterday the member of the board of the ECB, Isabel Schnabel, he said he was monitoring the situation “closely”, and was ready to use both existing and new tools if he encountered a “disorderly” market. “We will not tolerate changes in financing conditions that go beyond fundamental factors and threaten the transmission of monetary policy,” said Schnabel, adding that the ECB could use liquidity from maturing bonds in the markets as a first line of defense. stressed and, if necessary, also develop a new tool.
Weak stock markets in Asia, uncertain futures in Europe
Pending news from central banks, futures on European markets are cautiously rising as are those on Wall Street. The spread recorded a decline in the early stages, after the announcement of the extraordinary meeting of the ECB.
Closing down sharply for the stock market Tokyo where the Nikkei index closes the session with -1.14% at 26,326.16 points. This is the fourth consecutive session of losses. Improving news for the economy came from China: in May, retail sales fell again (-6.7%) but less than expected, while industrial production (+ 0.7%) beat expectations.
The currency front is in fibrillation, with the greenback rising to the highest levels in 20 years. “Against a backdrop of skyrocketing inflation, rising rates and growing recession concerns, the S&P 500 had its worst start to the year since 1962,” analysts at Goldman Sachs note, who also say “a possible spike in inflation it will probably not be enough to see the bottom of this bearish phase, which can only end when the Fed returns to a more accommodative policy “. L’euro overnight it stood at $ 1.0429, just above the one-month low.
Bitcoin’s decline affects more and more wallets
Bloomberg points out that the Bitcoin bear market has entered its “deepest and darkest” phase, cried Glassnode. Even those who have had cryptocurrency in their portfolios for the longest time, who until now could therefore enjoy relative peace of mind because they were purchased at low values, are now subjected to extreme pressures. There is in fact an indicator known as the “realized price” or the average purchase price of all the Bitcoins in circulation. It’s like averaging the carrying price of all BTC holders. Well, the leading cryptocurrency is currently a thousand dollars below the average value of 23,430, according to the company. The collapse of these days is starting to affect many portfolios.
Yesterday the sector was in turmoil as Coinbase announced it will cut 18% of its workforce, which in all is made up of about 5,000 full-time employees; around 1,100 people will therefore lose their jobs. Furthermore, the stock of Microstrategy, a software company of entrepreneur Michael Saylor, reacted positively to the pressures deriving from the sharp decline in Bitcoin and closed up 3.1%, despite the doubts of many experts and after the drops in the premarket. In fact, Microstrategy has over 129,000 bitcoins and, with Bitcoin briefly falling below $ 21,000 (and then returning to around $ 22,500), many experts have begun to talk about a possible forced liquidation, which would undermine the value of Bitcoin even further. A hypothesis disproved by Saylor, who assured that the company has enough virtual currency to cover the collateral requirements for a $ 205 million loan and that it would need to add collateral only if the price of bitcoin were to drop below $ 3,562.