The war destroys the European stock exchanges, Milan (-4.1%) “burns” 23 billion. Moscow shoulder bag

Listen to the audio version of the article

(Il Sole 24 Ore Radiocor) – The first day of the war in Ukraine has overwhelmed the financial markets, which until the end hoped for a beauty solution, with the shares that closed down heavily, albeit above the session lows (the European indices had come to yield over 5 points). While increasingly alarming news arrives from Kiev, and Western governments announce “severe sanctions” against Russia, the markets are experiencing a nightmare session, in which purchases have focused on asset shelter, on energy and on metals. The FTSE MIB it returned to its lows since July 2021, burning around € 23 billion in market capitalization. However, today’s decline, although very marked, is not the worst ever (the negative record is due to the outbreak of the pandemic, Brexit, the 9/11 disaster and the Lehman Brothers crack, while decreases similar to today’s are seen in late November with the arrival of Omicron and in January with the start of the crisis in Ukraine). The DAX 40 in Frankfurt is at its lowest for a year and also undergoes macroscopic declines CAC 40 in Paris, the Ftse 100 in London, theIBEX 35 of Madrid andAEX of Amsterdam. Increase the volatility with the Vix index back to the levels of April 2020, over 37 points.

Wall Street is falling, but GDP is holding up with a leap

In red Wall Street, already hit in the eve by the sell-off on equities with the S & P500 which entered the correction phase, for the first time since 2020, losing more than 10% from the highs reached at the beginning of the year and with the Nasdaq Composite, entered the «bear market», ie down by more than 20% from a recent peak, in this case from the mid-November record. Supporting the indices, avoiding the drops that have been seen in the Old Continent, is the jump in GDP (+ 7% in the fourth quarter, according to the second reading of the data, in line with expectations), the drop in requests for subsidies unemployment (-17,000 to 232,000 units, better than expected) and the inflation figure (+ 6.3% in the fourth quarter, less than + 6.5% of the previous estimate, with the “core” figure up by 5% , while the estimates were for + 4.9%). In the end, the American lists recovered and closed higher pushed by Joe Biden (Dj + 0.28%, Nasdaq + 3.35%).

Spread down to 164 points, ECB slowdown expected on end of stimulus

Closing down for the BTp / Bund spread. On European fixed income, a session was experienced in two stages: the first characterized by a brief flare-up at the start of the day that brought the spread between the yield differential between the ten-year BTp benchmrk (Isin IT0005436693) and the same Russian maturity up to 175 basis points from the 171 basis points of the previous closing. In the late afternoon, on the other hand, the dynamics of yields on the euro curve (which overall had not registered any sudden movements) changed direction. At the basis of the turnaround are the words of the governor of the Austrian central bank, Robert Holzmann, a member of the ECB’s governing council, according to which the ECB after the attack on Ukraine could slow down the plan to exit the economic stimulus program for the economy of the Eurozone. An approach also reiterated by Isabel Schnabel, another member of the executive committee of the ECB. At the end of the session, the spread stood at 164 basis points from the previous 171, while the benchmark ten-year BTp yield ended at 1.82% from 1.90% yesterday.

Gas prices jump: + 57% to 139.75 euros per MWh

The seemingly unbridled upward race in gas prices continues. The March maturity futures traded in Amsterdam gained 57.2% at € 139.75 per megawatt hour, while the April maturity rose 56% to € 138.67, only to settle on gains of around 40%. The increase in futures traded in the United States was more contained, up 5.12%. Europe imports 41% of its natural gas consumption from Russian gas pipelines.