European indices fall after Fed hints at higher rates for longer

European indices fall after Fed hints at higher rates for longer

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(Il Sole 24 Ore Radiocor) – Sharp decline for the European indices in the wake of Wall Street, after the Fed hinted at a picture of higher rates for longer than expected. Futures on American indices are also in negative territory, sales in Asia. The cost of money in the USA, as expected, has remained stuck at the highest levels of the last 22 years, and bankers predict another rise in interest rates of 25 basis points in 2023, as in June, but now they only imagine a cut of 50 basis points in 2024, against 100 points in June. The economy, therefore, will have to deal with high rates for longer because inflation is still too high. All eyes are on the Bank of England, after the unexpected slowdown in inflation, and on Friday on the Bank of Japan, which will close the week of central banks.

Meanwhile, the Swiss central bank left rates unchanged at 1.75% while the Swedish central bank raised the cost of money by 0.25% to 4%, as expected, and expects further increases.

In Piazza Affari, banks are bucking the trend

In Milan, bank stocks are bucking the trend: Unicredit it’s still the best, Bpm Bank, Banca Pop Er e Banca Mps they follow closely. Lame Mediobanca after the presentation of the list of the board of directors for the renewal of the board while the moves of the main shareholder Delfin are awaited. Above parity too Pirelli & C. Down with the oil companies (Tenaris ed Eni). He suffers Enel with utilities, luxury also goes down.

Dollar on the run after the Fed, euro aims for 1.06

On the currency market, the indications emerging from the meeting of the American central bank pushed the dollar index (which measures the performance of the greenback against a basket of currencies) to the highest since the beginning of the year in the 105.5 area while the exchange rate with the single European currency it returned to its lowest level since last March at 1.0649 euros for one dollar. Announcements from the Bank of Japan on monetary policy are expected on Friday: it remains to be seen whether the institution will surprise the market by bringing rates to zero or starting a normalization process.

Realizations on oil, Brent moves away from 95 dlr. Off the gas

The Fed’s hawkish position and the strength of the dollar put pressure on oil prices: November Brent trades at 92.7 dollars a barrel (-0.8%), November WTI drops by the same amount to 88.8 dollars a barrel . Natural gas falling below 36 euros per megawatt hour in Amsterdam.

2023-09-21 06:56:15
#Stock #market #Europe #Fed #USA #rates #high #longer

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