MILANO – European stock exchanges close down the focus of the markets aimed at the new epidemic wave in Europe and the risk of new restrictions. The reconfirmation of Jerome Powell at the helm of the Fed he pushed Treasury yields and the dollar higher, with investors expecting a tightening path in rates and monetary policy.
Oil, Biden sida Opec but (for now) it is not enough
The great protagonist of the day, however, is the Petroleum: US President Joe Biden has ordered the expected release of 50 million barrels of strategic reserves in coordination with other countries. The operation, announced by the White House, will be taken in parallel with others including China, India, Japan, South Korea and the United Kingdom. A clear move that goes against OPEC’s decision not to increase the rate of increase in production, as had also been requested by the White House itself.
For the financial agency Bloomberg this is an unprecedented coordination which, however, risks generating a counter-offensive by the cartel of producers, led by Saudi Arabia: their meeting is scheduled for next week. “The economic recovery is stronger and faster than anywhere else in the world,” the Biden administration claims, but despite all this, “American consumers are feeling the impact of high gas prices at the pump and in heating bills. American firms feel it too because oil supply has not kept pace with demand as the global economy emerges from the pandemic. This is why President Biden is using all the tools at his disposal to work to lower prices and address lack of supply “. Despite the news, after an initial fall, barrel prices have started to rise again, because the market finds the announcement’s quantification disappointing: when trading on the European market closes, the WTI rose by about $ 1 towards $ 78 a year. barrel.
Weak lists, Zoom collapse
Coming to the stock market, Europe ends in decline: Milano yields 1.62%, with Tim reversing course after yesterday’s leap, as Vivendi opposes the possibility of an offer from Kkr. In the rest of Europe, London manages to keep at + 0.2%, while Paris file 0.85% e Frankfurt 1.1%. Bad too Wall Street, where sales hit the technology sector in particular: the Dow Jones manages to turn up by 0.1%, when the EU lists close, while the S & P500 0.3% and the Nasdaq recover slightly to -0.9% . Among the stocks, unleashed sell-offs on Zoom, which tumbled about 14% after the video chat company warned markets about the risk of a slowdown in revenue.
Ideas for the markets came from the SME data: in Germany the services index rose to 53.4 against expectations of 51.5. Manufacturing fell to 57.6 but still above forecasts. For France, the six services index rose to 58.2 against expectations of 55.5 and for manufacturing to 54.6 (expected 53.1). The composite data of the Eurozonam also improved, rising to 55.8 from the expected 53.2.
Sitting weak instead in Asia, where Tokyo closed fractionally higher at + 0.09% e Hong Kong instead, it recorded a flurry of sales in the technology sector after yesterday’s negative session on the Nasdaq.
On the rise spread between BTP and German Bund. After yesterday’s 5-point increase, the differential opened at 128 points in early trading and then settled at 126 points with the 10-year yield of around 1%. Among currencies, theeuro closed higher, supported by the performance of the SME index better than expected and by the feeling, increasingly widespread on the market, that the ECB could raise interest rates by the end of 2022 to combat inflation. The single European currency was in the 1.1260 zone against the dollar and around 129.50 against the yen. The greenback is also gaining ground against its Japanese counterpart on the edge of 115.
The new collapse of the Turkish lira which weakened by nearly 10% against the dollar a day after President Recep Tayyip Erdogan insisted there would be no step back from his unconventional policy of cutting interest rates despite high inflation. The lira plunged to a record low of 13.44 against the dollar before recovering some of its losses. It was trading at 12.51 against the dollar in the late afternoon, down 9.9% since the close on Monday. The currency was trading at 14.08 against the euro. The lira has lost about 40% of its value since the beginning of the year.
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