Bets on new Fed rate hikes trigger the sell-off of the markets
There is no chance for those who bet on an easing of restrictive monetary policies: the strength of the US labor market, the minutes of the last Fed meeting, the performance of the American services sector confirm the strength of the US economy in this phase and leave then free field to the ‘hawks’ of the fed. All the wait now is for the official unemployment data, arriving tomorrow. The European stock exchanges, already weak in the morning, closed the session close to the day’s lows with drops of more than two percentage points: at the end of the trading the Paris Cac 40 index lost 3.13% with 7,082.29 points, the Milan’s Ftse Mib 2.53% with 27,506.91, Frankfurt’s Dax 2.60% with 15,522.95 while London’s FTSE 100 2.15% with 7,282.34.
On Wall Street, sales on equities and a jump in yields on bonds, with those on 2-year bonds at their highest for 16 years. The Btp/Bund spread rose to 175 points. Generalized sales on Milanese shares: only Fineco saves itself with a leap of 6% after the June collection data, which see a balance sheet of over 5 billion in the first six months. Saipem’s positive streak continues (+0.22%), all the other stocks are in the red, with Amplifon (-5.6%) in line with St (-5.18%), penalized by the “chip war” between China and the USA. On the currency side, after an attempt to rise, the euro lost ground and at the end of the day was traded at 1.0836 dollars (from 1.0879 at yesterday’s close). The single currency is also worth 156.72 yen (157.26), while the dollar/yen cross is at 144.63 (from 143.884). After some uncertainty, oil also takes the downward path, with concerns about the continuation of restrictive monetary policies which feeds fears about the stability of demand: the August wti loses 2% to 70.36 dollars and the September brent on 1 .9% to $75.19. The price of gas fell by 4.8% to 32.7 euros per mWh.