Home » Business » Stock markets today 10 June: lists in trouble after the tightening of the ECB, spread at 230

Stock markets today 10 June: lists in trouble after the tightening of the ECB, spread at 230

MILANO – 3:40 pm. After a day of great trouble for the world stock exchanges the decision of the ECB to start the rate hike and close net purchases of government bonds. To exacerbate the concerns of the markets comes the data onUS inflation: in May, prices increased by 8.6%, over the 8.3% expected, thus reaching their highest levels in 40 years. Among the European financial centers is Milano to be identified as the weak point to be hit: Piazza Affari lost 4.4%, with Bper particularly penalized afterwards the presentation of the business plan to 2025. However, the entire banking sector is suffering, with even the big names like Intesa and Unicredit losing more than 5%. Net decreases, but less heavy, on the other exchanges: London -2,1%, Frankfurt -2,3%, Paris -2.4%. Departure in sharp decline also for Wall Street: the Dow Jones lost 1.7%, the S & P500 2.3% and the Nasdaq 1.9%.

Yesterday’s decision was expected by the markets, although there are elements that have led to a “hawkish” reading of the Eurotower’s position: Lagarde announced a 25-point hike in July, but September’s will be heavier unless (unlikely) inflation improves. And it has not given clear signals on the moves to protect the weaker countries from the increase in spreads, which promptly occurred for Italy: it will resort to flexibility in the reinvestment of the securities bought with the anti-pandemic program and – assured the president – will be able to refine further tools, but there are no particular alert levels at which they will trigger. Furthermore, the growth scenario remains very fragile due to the unknown war in Ukraine, with its load of price increases, which due to the very effects of monetary tightening. If you add all these things together, it explains the weakness of the euro that yesterday closed the day with the sharpest decline in the dollar in a month: a paradox, at a time when monetary tightening should usually strengthen the single currency. Investors begin to discount the growing risks to European growth, is the reasoning of Dominic Bunning of HSBC with Bloomberg, “which could limit the ECB from realizing the monetary tightening that the market has begun to price” after yesterday’s announcements. On the other side of the Atlantic Ocean, the current US inflation holds the table and puts the Fed back against the wall to accelerate the pace of the monetary tightening that has already begun: the market assumes that next week it will increase interest rates, even if the thesis spreads according to which it is likely to threaten the economic performance too much.

Today the single currency is positioned flat around 1.06. Lo spread between Italian BTPs and German Bunds is confirmed in tension, but does not widen: the yield differential after an initial flare is positioned just above 220 points, the highest since May 2020. The yield of the Italian ten-year has reached 3.758% and is now just over 3.6 per cent.

The difficult session in the USA last night reverberated on the Asian markets with the closing down sharply for the stock exchange. Tokyo: the Nikkei index closes the session down by 1.48% to 27,828.50 points. Among other Asian squares, on parity Hong Kong in closing, while the Chinese stock exchanges are positive (Shanghai +1,1% e Shenzhen + 1.7%) on less heavy inflation data than expected which offset fears for the new Covid lockdowns. Indeed, Chinese producer prices are slowing down: in May, there was an increase of 6.4% on an annual basis, compared to + 8% in April.

Also from China comes the information that is driving oil prices down, even if they are close to three-month highs: they weigh fears about new lockdowns in Shanghai and despite solid demand for fuels in the United States, the world’s largest consumer. Brent futures fell 0.6%, to $ 122.34 a barrel while WTI was down 0.63% and fell 72 cents, or 0.6%, to $ 120.79 a barrel.

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