The stock exchanges of today, March 31, 2022. EU price lists close in red. US, “record release” of oil stocks: the price of crude oil falls

MILANO – European stock exchanges closed weak after opening the session on positive ground. The markets are still uncertain about the extent of the glimmers of peace glimpsed in recent days in Istanbul, where delegations of negotiators from Moscow and Kiev met last time. The tug-of-war over gas also weighs on, with Vladimir Putin wanting foreign buyers to pay in rubles for Russian supplies from April 1, under penalty of termination of contracts, and European countries not intending to give up, as the German Chancellor clarified. Olaf Scholz. Lastly, the data on European inflation that is galloping in the main economies are of no use. Milano at the end of the day it recorded a loss of 1.1%, Frankfurt dell’1,31%, Paris of 1.21% while London it moves back by 0.85%. Weak trend a Wall Street: at the close of European trade, the Dow Jones lost 0.4% and the Nasdaq 0.16%.

Biden announces a “record release” from oil stocks

The star of the day is oil, which opens sharply after the first rumors of the Reuters on the US ready to release crude oil stocks. In the Italian afternoon, the White House details the plan: the United States will release one million barrels a day of oil from its strategic reserves over the next 6 months. “After a series of consultations with allies and partners,” the note reads, “the president will announce the largest release of oil from reserves in history, placing on the market one million barrels per day on average, every day, for the next 6 months “. According to the White House, “the world has never seen a release of oil reserves at this rate of one million barrels a day for so long. This record release,” the statement adds, “will provide a historic amount of supply and it will serve as a bridge until the end of the year, when domestic production will increase “. At the close of the European markets, both the American WTI and the European Brent lost more than 4%, reaching respectively 103.3 and 108.4 dollars a barrel.

Unicredit analysts take note of the move in their pre-opening market note, and the strong impact on prices. But they admit that, with this kind of news, falls in prices are usually short-lived. For two reasons. First, it is difficult to combat a problem of lack of raw material (which is potentially infinite) with a resource that is by definition finite, namely stocks. Secondly, once reserves drop above a certain threshold, markets begin to fear that they are insufficient to respond to a new shock, so they push prices back up. If we consider, then, that no big news is expected from OPEC +, the drop in prices today could be short-lived.

After a declining start, the price of the gas at the TTF in Amsterdam, the European reference market: at the end of the day it was up by 3.89% in Europe to 124.5 euros per megawatt hour in the future in May.

Weak stocks in Asia, Chinese tech weighs

Tokyo closes down by 0.73%, Hong Kong drops by 0.76% and Shanghai falls by 0.44% while Shenzhen falls by 1.19%: the weight of lockdown in Cina. Precisely the data on Chinese production are beginning to reflect the impacts of the new closures and fuel doubts about the pace that local productions are able to keep. In March manufacturing activity in China it contracted for the first time in five months, penalized by an epidemic rebound that is leading to confinement and weighing on activity, according to official data published today. The manufacturing PMI index stood at 49.5 points against 50.2 in February, when the deterioration in health conditions was already putting pressure on the economy, as announced by the national statistics office. A number above 50 indicates an expansion of the business, below we are contracting.

The impact of the war on Russia and Ukraine. But the ruble recovers

On a day full of macro data, new estimates arrive on the economic impact of the conflict in Ukraine: it will plunge the Ukrainian economy into its strongest contraction in over 25 years with GDP plummeting by 20% this year. But if there were a “ceasefire” in the next two months, the rebound would be significant and in the order of + 23% in 2023. These are the forecasts of the European Bank for Reconstruction and Development. The invasion and sanctions will collapse the Russian economy by 10% this year. In 2023, there will be no record growth: Moscow has lost about $ 30 billion in export revenue due to recent sanctions on oil and gas, equivalent to about 2% of GDP.

On the currency market, the exchange rate between euro and dollar it remains above 1.11 and is traded at 1.1116. Dollar / yen at 121.434. Euro / yen at 134.9 (from 136.11). Still retrieve the ruble which trades at 82 for one dollar (from 84.5). The spread closed up at 149 points, from 147 yesterday.

As mentioned, there are many data for the day. In the fourth quarter the Great Britain’s GDP it ran more than expected, marking + 1.3% against the 1% previously estimated. In 2021, the economy grew by 6.6%, while the consensus indicated + 6.5%. Growing the German retail sales: + 0.3% monthly in February, + 7% on the year. Both theinflation that theoccupationwhile Prometeia cuts the estimates on Italian growth.

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