MILANO – The words spoken yesterday by the Fed Chairman Jerome Powell, which paved the way for an easing of the ongoing monetary tightening, bodes well for the markets. In his speech to the Brooking Institution, Powell said that the US central bank is preparing to raise rates by half a percentage point in December, thus interrupting a series of 4 consecutive downward increases of 75 basis points.
Europe is experiencing a whole day with a plus sign, also encouraged by the data that arrived yesterday on inflation in the Eurozone, which showed signs of a slowdown, giving hope that the path of rate hikes undertaken by the ECB could also slow down in Europe. Positive climate also in Asia: Tokyo earn 0.9%, Hong Kong advances 1.4%, Shenzhen by 1.2% and Shanghai by 0.4%.
Milan closes on the rise
The Milan Stock Exchange closes on the rise. The latest Ftse Mib index gains 0.31% to 24,685 points
The spread closes at 190
The spread between the BTP and the Bund closes at 190 points with the yield on the Italian 10-year bond at 3.71%.
Price cap on oil, EU seeks agreement on ceiling at 60 dollars
New compromise attempt in the EU on the price cap for Russian oil. According to what has been learned in the meeting of the Representatives of the 27 this morning there was a new exchange of views on the dossier, on which a stalemate has persisted for weeks created on the one hand by the Baltic front (which is pressing for a ceiling as low as possible) and on the other, by the Mediterranean countries worried about the repercussions on their crude oil shipping companies.
A new compromise proposal, put forward by the Commission, has been put on the table: the price cap would be set at 60 dollars a barrel and would be accompanied by a Commission statement on transparency in the negotiations within the so-called ‘price cap coalition’, which also includes the G7 countries. The proposal, which lowers the ceiling by 5 dollars compared to the initial scheme, would have met the approval of most member countries. Once again, however, it was Poland that asked for additional reflection. But a yes from Warsaw, this time, could unblock the agreement.
Positive start for the European Stock Exchanges
A bullish start for European stock exchanges, supported by the ‘dovian’ turnaround by Fed chairman Jerome Powell. After the first trades, Frankfurt rose by 0.99%, London by 0.20%. Paris by 0.70% and Milan by 0.79%.
The euro opens higher against the dollar
The euro opened higher in markets taking advantage of the general weakening of the dollar after Fed Chairman Powell announced an easing of the pace of rate hikes. The greenback, which had been racing in recent months precisely in the wake of US monetary tightening, is losing ground against the single currency which trades at 1.045 (+0.4%). In Asia, the yen rose by 1% to 136.29.
The spread opens down
A downward start for the Btp-Bund spread, with the yield differential between Italian and German ten-year bonds narrowing by 4 basis points around 190. The yield on Italian bonds fell sharply, falling by 12 points per 3.74%, in a positive start to the session for all Eurozone sovereign bonds.