MILANO – 5 pm US inflation in April exceeds analysts ‘expectations and rekindles the markets’ fears of overheating prices, which could weigh on the post-pandemic economic recovery and open to a change in attitude by the Federal Reserve, which has so far maintained the utmost caution on rates and ensured tolerance on inflation before taking action.
According to the American data of the early afternoon, the cost of living marked a tendential growth of 4.2% (top since 2008) against an expected + 3.6% and a significant acceleration from + 2.6% in March. Consumer prices rose by 0.8% monthly against + 0.6% in March, again above the expected + 0.2%. The economic recovery, the reopening and the trend of raw materials are the basis of the dynamics, which in the annual variation is also due to the weakness of 2020 linked to the lockdowns. Even the “core” component of prices, the one that excludes volatile elements such as energy and food, beat the estimates: the core figure grew by 0.9%, against expectations for + 0.3%, registering the largest monthly increase since April 1982. Even in the annual comparison, inflation net of the ballerina components was stronger than expected: + 3% against expectations for + 2.3%.
The data were felt on Wall Street, which saw the selloff of the technology sector accelerate with the Nasdaq at -1.8% at the close of the European stock exchanges. The Dow Jones lost 0.75% and the S & P500 1.2%. Treasury yields rallied with the dollar. The euro closes down: the exchange rate against the dollar, which moved at around 1.2125 at the end of the morning, slipped below 1.21, in the 1.2075 zone. In Europe, on the other hand, the lists hold the blow: Milano manages to remain positive and closes up 0.23%. London salt by 0.78%, Frankfurt 0.21% while Paris adds 0.19%. A flurry of accounts arrives in Piazza Affari – Poste, Mediaset and Snam – while Unicredit announces a reorganization.
Inflation accelerates, that’s why. “But there are temporary factors behind it”
by Sara Bennewitz, Raffaele Ricciardi
The inflationary outlook is suffering the most from tech stocks, which ran the most during the pandemic and now have more to lose in the event of a correction. The possibility of a rate hike plays against them, with a consequent increase in the cost of debt that usually characterizes them. Also for these factors, it was the country that paid the most in Asia Taiwan Stock Exchange which has come to lose 8.6%, also due to the restrictions related to Covid. Then the Taipei market rose to close at -4.1%. The island of Taiwan has been one of the most virtuous so far in containing the pandemic, with just 1,200 cases and only 12 deaths. The Taiwanese economy grew by 3.1% in 2020. However, the authorities have been forced to introduce new restrictions recently for fear of some outbreaks of infection. Tokyo ended the day in sharp decline (-1.6%), while Hong Kong (+0,8%) and the Chinese Squares (Shanghai + 0.6%) went against the trend.
Already in Germany consumer prices were confirmed, which grew in April by 0.7% monthly and 2% on an annual basis. The confirmation of the inflation trend, the final figure, is in line with market estimates. The harmonized inflation figure, on the other hand, shows an increase of 0.5% monthly and 2.1% annually, also in this case in line with forecasts. It should be noted that in Great Britain the economy contracted by 1.5% in the first quarter, slightly better than the -1.6% expected, due to the containment measures linked to the pandemic.
It spread between BTP and German Bund it is stable at 114 basis points. However, the yield of the Italian ten-year rises to 1.02%, the highest since September 14, 2020.
Among commodities, oil prices are on the rise with WTI exceeding $ 66 a barrel and Brent pointing to $ 70. The latest API data showed that crude oil inventories in the United States fell by 2. 5 million barrels last week. Quotations oforo down on the Asian markets in the face of forecasts of recovery of the US economy. The bar with immediate delivery changes hands at $ 1,830 an ounce, down 0.3% on the eve of prices.
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