The European stock markets are directed downwards in the week that is characterized by the meetings of the central banks on rate hikes. Stock markets are betting on a 50 basis point hike by the Fed, but uncertainty remains high. “I believe that by the end of next year we will see much lower inflation if there is no unexpected shock”, he tried to reassure CBS, Janet Yellen. The US Treasury secretary admitted that “there is a risk of a recession” but in her opinion “it is certainly not something necessary to bring down inflation”.
Always keep an eye on the energy sector, which returns to the center of European discussions with the gas price cap on the table first of the ambassadors and then of the ministers. Meanwhile in Asia the session was weak, above all due to concerns about Covid which is growing in China after the easing of prevention measures.
Great Britain, GDP surprises on the upside
The British economy rebounded 0.5% in October compared to September, after a particularly sharp decline in the previous month due to a public holiday for the funeral of Elizabeth II. This was reported by the national statistics office. On an annual basis, GDP increased by 1.5%. Expectations were for a monthly increase of 0.4% and 1.4% per year. GDP had fallen by 0.6% in September, when the royal funeral caused the closure of many companies. In the third quarter, the contraction was 0.2%.
The price of gas opens down, but above 130 euros
Gas prices open lower in Europe. At the TTF in Amsterdam, the European reference hub, contracts drop 5.83% to 131 euros per megawatt hour. There is anticipation for the extraordinary European Council of Energy Ministers scheduled for tomorrow which will have to evaluate the new proposal of the EU Commission on the price cap and on a temporary mechanism for correcting the gas market.
EU stock exchanges open down
The European stock exchanges open a crucial week down which will be marked by a rich agenda of macroeconomic data and by the decisions on rates by the Federal Reserve and the ECB. The verdict of the Fed is expected on Wednesday, which should calibrate US rates at 50 basis points, thus defining the new cruising speed of the central banks and slightly restricting the increases, compared to those of three quarters of a point approved in previous meetings. Thursday will be the turn of the ECB, which analysts expect will raise the cost of money by half a percentage point. New estimates on growth and inflation are also awaited from Frankfurt and above all indications on the forthcoming reduction of Quantitative Tightening. The decision of the Bank of England is also expected on the same day, which should also proceed with a 50 basis point increase. The Cac index of Paris dropped by 0.41% to 6,650.56 points, the Dax 30 of Frankfurt fell by 0.55% to 14,292.15 points and the FTSE 100 of London recorded a drop of 0.29% to 7,455.30 points. In Piazza Affari, the Ftse Mib lost 0.40% in the first trades.
Among individual Milan stocks, Tod’s was down by more than 5% after Della Valle gave up on the merger with DeVa.
Wall Street ed Europa, future in calo
A downward start is expected for the European stock exchanges in a crucial week marked by the decisions on rates by the Fed and the ECB. Futures on the Ftse 100 drop by 0.27%, those on the Dax of Frankfurt mark a decrease of 0.18% while those on the EuroStoxx 50 record a -0.53%.
Futures on Wall Street continue to decline: futures on the Dow Jones mark -0.05%, those on the S&P 500 drop by 0.06%, while futures on the Nasdaq drop 0.12%. According to analysts, the US central bank will raise rates by 50 basis points after four months of hikes of 75 points. Additionally, traders will be watching retail sales, manufacturing and services PMIs, industrial production and the Philadelphia Fed Manufacturing Index.
Tokyo closes down 0.2%
The Tokyo Stock Exchange closed slightly lower with the Nikkei index down 0.21% to 27,842.33 points, on fears that the Federal Reserve could keep interest rates higher for longer. Tech stocks fell after Friday’s US producer price data suggested US inflation could prove more persistent than previously thought ahead of tomorrow’s US consumer price report and rate decision of the Fed expected for the following day.
Oil prices down on Asian markets
Oil prices on the rise in Asian markets. Uncertainty over the closure of the Keystone pipeline linking Canada and the United States after Thursday’s leak in Kansas prevails as Russian President Vladimir Putin threatens to cut production in response to the price cap and not to sell to those Countries that will adopt it. Brent futures rose by 0.66% to 76.59 dollars a barrel, those on WTI crude by 1.08% to 71.78 dollars a barrel.