MILANO – 9:15 am. Concern is growing on the financial markets about the Omicron variant and the anti-contagion closures that are starting to make their way around the world, starting with Holland. The impasse on Joe Biden’s public spending plan also weighs on the mood of investors, and of Wall Street in particular, which adds tension at a time of the year when market liquidity is scarce and it is therefore easier to see strong variations.
Asian exchanges have moved sharply down this morning, while the opening in Europe, futures on the US already let talk of “Black Monday”. Milano starts the day down by 2.3%, Frankfurt drops 2.21%, Paris 2% e London leaves 1.7% on the ground.
On the other hand, assets characteristic of a moment of escape from risk, such as US Treasuries, the dollar itself and gold, which has reached a three-week high, rose. Deep red for the Petroleum, which first recorded fears that the growth in infections would block the economic recovery and put the flight industry back to ground, a major fuel consumer but also the first to suffer from lockdowns. Brent crude oil futures fell 3.37% to $ 71.04 a barrel while WTI futures fell 3.78% to $ 68.18 a barrel. Movements that arrive, however, in a phase of new tension on the energy market: as he says BloombergIndeed, there is concern among traders about the extremely cold days ahead for Europe and Russia’s intention to keep gas flow limited throughout the day.
The Asian stock exchanges have already moved in deep red, on fears of the spread of the Omicron cases and of new restrictions. TO Hong Kong Hang Seng index yields 1.99% mentre Tokyo closed with -2.13%. The index Shanghai Composite lost 1.07% while the index Shenzhen Composite of the second Chinese stock market fell 1.77%.
Precisely on the Chinese market there was the move of the Central Bank (Pboc) which cut the Loan prime rate (Lpr), thus reducing the financing costs for banks. The one-year rate goes from 3.85% to 3.80%, while the 5-year rate remains unchanged at 4.65%. The measure aims to increase the liquidity of the banking system for corporate loans. It is the first time it has made such a move since April 2020. Beijing’s move to lower the LPR was widely expected, but also highlights China’s monetary policy divergence from other major global central banks, which are set to raise interest rates. A number of recent economic indicators, including retail sales and investment growth, point to a slowdown in the Chinese economy, while a regulatory crackdown on the tech sector has dampened investor sentiment, along with fears of new restrictions. to combat the increase in Covid cases. “The move is a concrete signal that China is moving towards a supportive monetary policy, “he says Jeffrey Halley, an analyst at OANDA, for whom Beijing “seems to wink at the slowdown in growth next year”.
As for government bonds, he said about the strengthening of US bonds spread between BTP and Bund Germany opens 133 points higher, compared to 130 points on Friday’s close. The 10-year yield rises to 0.95%, compared to 0.94 on the eve. As mentioned, the euro is down against the dollar which is trading at its 20-month high, after the Fed’s “hawkish” turn and the now discounted rate hike that will take place in March and in conjunction with the search for safe assets in which to invest. The single currency is trading at 1.1249 against the dollar and down sharply to 127.55 against the yen. Dollar / yen at 113.39.
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