MILANO – 12 noon. Weak day for equity markets, while investors’ attention remains focused on risk-inflation and on the next moves by central banks: tomorrow is the turn of the Fed which, according to the toto-analyst, will announce the tapering, or the closure of its purchases of securities to support the economy. If the quarterly reports have so far supported equity markets, bringing new records to Wall Street, for observers the possible restart of Covid infections (some worrying signs have come from China), but above all the increases in commodity prices and global chains of supply still on tilt may soon change the cards on the table. “We expect financial market volatility to remain high, not only for the fed but also because other central banks will try to limit liquidity due to high inflation,” wrote Lon Erickson of Thornburg Investment Management, quoted by Bloomberg.
The day of the European lists proceeds uncertain, with futures on the US as weak as were the exchanges in Asia. Milano is unchanged (-0.01%) at mid-day, the others are contrasted: London drops by 0.5%, Frankfurt salt by 0.5% e Paris 0.4%.
The markets are betting on the tightening of the ECB. Spread still rising
by Giovanni Pons
For now, it has been above all the BTP, which in recent days has seen a rise in yields linked to the fact that the market expects a rate hike from the ECB already in 2022. Christine Lagarde, president of the Eurotower, failed to dispel doubts at last Thursday’s meeting. The spread between BTP and Bund it reached 135 points, but for Unicredit analysts it is a movement that is too rapid and disproportionate in size. “To be clear, the analysts of the Italian bank write, at 135 basis points the spread over the ten-year is the highest since November 2020, when the ECB had not yet announced the latest increase in the Pepp package (the anti-pandemic purchase plan, ed), the economic prospects were much less bright than now, and the political scenario was more unstable “. In short, it would be an over-reaction of the markets, which in any case gives the measure of how things can go if the ECB fails to give a a clear sign of the ability to avoid the fragmentation of the financing cost situation in the Eurozone. For experts, in any case, given Italy’s economic fundamentals, it is possible that the spread will close again in the coming weeks.
Meanwhile, today spread between the ten-year BTP and the German Bund counterpart opens at 129.7 points, down from 132 at yesterday’s closing, when it rose above 133 points today. The reference rate drops to 1.169%.
Investors also take note of the data arrived with the Pmi indices which anticipate the performance of the manufacturing sector: in Italy the indicator measured by Ihs Markit for October in Italy rose to 61.1 points from 59.7 in September (above 50 points indicates economic expansion). The figure is higher than analysts’ estimates: this is the sixteenth consecutive month of growth and is the highest since June. As for orders, the index rose to 61.7 from 58.9 in September, expanding for the 11th consecutive month. The climate is different for the Eurozone complex, where i supply problems faced by manufacturing companies are presenting an obstacle to recovery: they are hindering production schedules and denting orders, causing a slowdown in the growth of both indices. The final reading of the Eurozone manufacturing sector PMI thus fell to 58.3 in October, from the ‘flash’ estimate of 58.5 and down from 58.6 in September. Overall, this signaled the slowest improvement in manufacturing conditions since February. The slowdowns especially in Germany and France, where their respective manufacturing SMEs fell to their lowest levels in nine months.
The euro opens higher above $ 1.16. The single currency changes hands at 1.1608 dollars and 131.86 yen. Dollar / yen down to 113.62. Investors’ eyes are on monetary policy decisions Federal Reserve expected Wednesday after the European Central Bank’s dovish stance last week.
This morning, the Tokyo Stock Exchange closed down with the Nikkei index which lost 0.43% to 29,520.90 points. Chinese stock exchanges are also negative, in the wake of fears about Covid-19 outbreaks: the Composite index of Shanghai sold 1.10%, Shenzhen 0.81%.
The Reserve Bank of Australia (Rba) decided to keep the interest rate target unchanged at an all-time low of 0.1% for the 12th consecutive month, continuing to buy government bonds at a pace of A $ 4 billion a week at least until mid-February. 2022. However, the central bank withdrew its strategy of setting the target for Australian government bonds maturing in April 2024 at 10 basis points in the wake of the “improvement in the economy and progress made, announced ahead of expectations. , towards reaching the inflation target, “explained Governor Philip Lowe.
Among the commodities, the prices of the Petroleum they are up slightly at the start of the day. The benchmark WTI crude oil gained 0.3% at 84.29 dollars a barrel (84.05 last night in New York). Brent rose 0.47% to 85.11 dollars a barrel. Quotations oforo growing on the Asian markets. The immediate delivery bar is up 0.13% to $ 1795 an ounce.
.