After three weeks of hiatus due to the invasion of Ukraine, the activity of Moscow Square has resumed, but only Russian federal government bonds are treated while the stock market will still remain stationary. Piazza Affari ends with the Ftse Mib index up 0.3% to 24,294 points. The 10-year Italian BTP yield closed at 2.006% according to Bloomberg, the highest level since the end of April 2020. Fitch cuts Italy’s GDP estimates
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The Moscow Stock Exchange reopened today after three weeks of hiatus due to the invasion of Ukraine. Since this morning, however, only Russian federal government bonds have been traded while the stock market is still standing. Russia’s bonds, according to reports Bloomberg, resumed trading after the central bank pledged to buy government debt to increase liquidity and help stabilize the financial system. The 10-year Russian government debt yield is down 44 basis points to 11.84%. European stock exchanges close uncertainly, oil prices rise (ALL UPDATES LIVE – THE SPECIAL). The 10-year Italian BTP yield closed at 2.006% according to the platform Bloombergthe highest level since the end of April 2020. The spread between the Treasury product and the German Bund increased from 151 basis points at the start to 154 at the end of the session.
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The trend of the European stock exchanges
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Ukraine, from Apple to Coca Cola: companies leaving Russia
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In Europe, the attention of investors is still focused on the effects of the war in Ukraine, but also on the trend in commodity prices which affect inflation. Equity markets on the Old Continent closed without a precise direction in the first session of the week: London finished up 0.4%, with Amsterdam up 0.2%. Both the Paris and Frankfurt stock exchanges were down by 0.5%, with Madrid negative by 0.2%. Positive session for the Milan Stock Exchange: the Ftse Mib index closed with an increase of 0.3% to 24,294 points.
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Accelerate the oil
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Ukraine, Russia threatens Italy: what are the possible consequences
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Oil prices accelerate further after a bullish start to the day. Not only are the implications of the war between Russia and Ukraine but also the tension arising from the attacks in Saudi Arabia to give wings to the prices. The world’s leading oil producer has in fact warned that the offensives by Yemeni rebels against the kingdom’s oil facilities represent a “direct threat” to global supplies. The North Sea Brent rose 6.1% to $ 114.55 a barrel and the US WTI jumped 5.5% to $ 110.48.
Asia closes down
The Asian stock exchanges, orphans of Tokyo closed for holidays, weakly file the first session of the week. Also in this case, the effects of the war in Ukraine by Russia are weighing on the markets while attention remains high for fears of a new wave of infections from Covid-19.
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Fitch cuts global GDP estimates
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Istat: worrying inflation in Italy. And it won’t go down any time soon
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Meanwhile, the Fitch agency cuts global growth estimates with the blaze of inflation and the invasion of Ukraine by Russia. World GDP is expected to grow this year by 3.5%, or 0.7 percentage points less than previous forecasts, while in 2023 growth is expected to be 2.8%, -0.2 points. Euroland’s GDP was cut by 1.5 percentage points to 3% in 2022, while US growth was cut by 0.2 points to 3.5%. The outlook for global growth has “deteriorated significantly as the challenges posed by inflation intensify and the invasion of Ukraine by Russia threatening global energy supplies,” says Fitch. Russia provides about 10% of the world’s energy, and a jump in oil and gas prices will increase costs to industry and real consumer incomes, Fitch explains, predicting that inflation in the eurozone will average 5%. in 2022. “US exposure to Russian energy is less but the rise in oil prices adds that it was already becoming a problem,” Fitch notes, predicting seven Fed interest rate hikes in 2022. “Inflation challenges and energy shocks could weigh more heavily on GDP growth” if it were to trigger a more rapid Fed tightening, push oil prices to $ 150 a barrel for a sustained period, and when associated with widespread energy rationing in Europe.
Italy’s GDP also down in 2022 to 2.7%
As part of the downward revision of global growth forecasts, Fitch also “significantly reduced” the estimates for Italy, whose GDP will grow by 2.7% in 2022, compared to the 4.3% expected before the invasion of Italy. Ukraine by Russia. The scissoring, explains the rating agency, “largely reflects the effects of the war in Ukraine and its associated impacts on inflation and the supply chain, together with weaker growth expectations in the first quarter of 2022 due to the variant. Omicron. For these reasons we expect the Italian economy to reach its pre-pandemic levels only in the third quarter of 2022 “. Fitch recalls that Russian gas represents about “one fifth of Italy’s total primary energy consumption”, the highest level among the main four economies of the Eurozone, and therefore our country “is particularly exposed to rising gas prices. natural and any interruption of supplies “. The rating agency raised its inflation forecast at the end of the year by 2.1 percentage points to 3.1%: “This will reduce consumption while real spending power is also limited by weak wage growth”.
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