The European stock exchanges do not pass unscathed through the expiry of the 3 witches. On the day of the rebound of the US and China, the equity markets of the Old Continent mark yet another setback. In reality, the technical deadlines do not have much to do with it. A figure released in the morning prompted sales on European markets, as traders consider it alarming. This worrying news has stopped the European markets on the day of the witches and could also weigh in the next sessions.
The three witches did little damage
Today was the day of the three witches. It is called this way because on this date three technical deadlines coincide. A number of futures and stocks have expired today. It means that those who have these derivatives in their portfolio are forced to sell. This event happens 4 times a year, on the third Friday of March, June, September and December.
These technical maturities all together generate an increase in volatility, especially in the first part of the day. Sometimes this volatility causes the markets to fall rapidly, even if they then recover the lost positions. But today none of this has happened, on the contrary the European markets have started to rise. Piazza Affari itself opened well above yesterday’s closing level. Unfortunately, some news came to ruin the party. The spread of a European macroeconomic figure has worried operators who have started to sell.
This worrying news stopped European markets on Witches’ Day
The annual inflation figure in the EU was released today. The price increase in August in the Eurozone was 3%, well above the 2.2% in July. Inflation in the 27 countries of the Union was higher, reaching 3.2% against 2.5% in July. Inflation of 3% is much higher than the 2% target set by the European Central Bank. So traders began to worry that rising inflation could lead the ECB to intervene in the money market by reducing the PEPP earlier.
The possible early reduction of the emergency stock repurchase plan worries operators. That is why after this data the prices on the European stock exchanges started to fall. The weak opening of the US stock market gave a further downward push to prices. At the end of the session, the major index of Piazza Affari closed down by 0.9%. The Ftse Mib (INDEX:FTSEMIB) closed at 25,728 points, but prices hit a low of 25,696 points.
Deepening
