MILAN – European stock markets slowed in the middle of the day, dissipating the boost they received from a Wall Street that hit new records on Friday and breaking a fast from highs that had lasted 500 sessions. A record reached almost by inertia, considering stocks have made only modest gains over the last month: the Wsj In fact, it is clear that bets on an accelerated rise in interest rates have weakened significantly, which is likely to weigh on global indices. There are anecdotal signs that the Fed is cautious about cutting the cost of money: The job market is still strong, the economy is slowing only slightly. And indeed, government bond yields have risen somewhat after the sharp decline at the end of 2023. Then the geopolitical tensions emanating from the Red Sea remain in the background. Tokyo has taken advantage of this for the time being with a closing price of +1.6%.
The spread increases
The spread between BTPs and German Bunds rose slightly to 154 basis points, with the Italian 10-year bond yield on the secondary market falling 5 basis points to 3.82%. The yield on federal bonds fell by 6 points to 2.28%, that on Spanish bonos by 5 points to 3.19% and that on Greek 10-year bonds by 5 basis points to 3.28%. At the start of the session, the BTP-Bund difference was 152 basis points.
Stock markets in the EU, including Milan, are slowing down
European stock markets slow mid-session and Milan falls into the red, with the Ftse Mib index at -0.33%. London is up 0.18%, Frankfurt is up 0.42% and Paris is up 0.38%. There is anticipation for the ECB’s monetary policy decision on Thursday. The central bank will certainly keep interest rates steady after halting rate hikes in October, but investors will carefully study President Christine Lagarde’s comments for information on rate cuts later in the year. In Davos, Lagarde explained that it was too early to claim victory over inflation and, consequently, to discuss interest rate cuts.
Legacoop, two out of three Italians see black
Italians are not very optimistic about the country’s prospects in 2024. Two out of three respondents (67%) do not expect any improvement in Italy’s overall situation, parallel to negative expectations regarding the development of the international scenario and a strong concern about ongoing conflicts (85%), relations between the West and Russia (83%), climate change ( 81%) and terrorism (80%). Things are looking somewhat better with the family situation, which, according to 4 out of 10 respondents, will be “up and down” for the year that has just begun, although with positive expectations for the development of family relationships (81%), love, affection, etc to friends (77%), health (71%), work (61%). This emerges from the FragilItalia report “A look into the future”, developed by Area Studi Legacoop and Ipsos.
Agricole enters the world line and pushes Nexi
The payments sector is one of the protagonists of the day on the stock markets following the move by the French bank Credit Agricole, which acquired a 7% stake in Worldline with the intention of becoming a minority shareholder in the long term. The investment, the institute explained in a statement, is part of the strategic partnership between the two groups, for which a binding agreement was signed last summer, and aims to become the main player in the French market for security services Support Worldline in its European strategies. The move is also reflected in the other lists: Nexi is among the best in Piazza Affari (+1.9%) and Adyen (+2%) is lively in Amsterdam. Rumors are returning to the Italian group about the next reorganization of the shareholder structure, in which Cdp (with around 13.5%) and several long-term private equity funds participate.
The Hong Kong stock market closes significantly in the red
The Hong Kong stock market closed significantly in the red, with the Hang Seng index losing 2.27% to 14,961.18 points. The index is near its 15-month low. China’s central bank (PBOC) left its key interest rate unchanged amid downward pressure on the yuan, disappointing investors who had expected measures to stimulate the economy. Last week, the People’s Bank of China surprised markets by leaving its medium-term lending rate unchanged.
The spread returns above 150
The spread between BTPs and Bunds rises to 151 points, after a sharp decline at 148 points. Italy’s 10-year yield fell 5.7 basis points to 3.81%. Interest rates on other European government bonds also fell. The German 10-year bond is at 2.3% (-3 points), the Spanish one at 3.19% (-4 points) and the Greek one at 3.3% (-3 points).
Asia, sharp falls on the Chinese stock markets
Asian stock markets closed with Chinese share prices falling following the central bank’s decision to keep interest rates unchanged. Fears about Beijing’s economic growth are growing among investors. Closing price against the trend for Tokyo (+1.6%), on the first day of the central bank’s interest rate meeting. On the exchange rate front, the yen is weakening against the dollar, trading at just under 148 and at 161.30 against the euro. Prices in Shanghai (-2.7%) and Shenzhen (-4.4%) are high. Seoul (-0.3%) and Mumbai (-0.4%) also fell. With negotiations still ongoing, Hong Kong stands at 2.8 percent.
The spread reaches under 150 points
The spread between BTPs and Bunds fell below 150 points (148 points) at the start of the session, reaching March 2022 levels. The yield on the Italian 10-year bond recorded a five basis point decline to 3.82 percent.
Piazza Affari starts uphill
Piazza Affari rose in early trading at the start of the week, with the Ftse Mib at +0.15% at 30,391 points. ECB President Christine Lagarde spoke in Davos of a possible interest rate cut in the summer, but emphasized that the battle against inflation was not yet won.
The euro barely moved while waiting for the ECB
The euro is barely above the $1.09 threshold at the start of the week, given the ECB’s decision on Thursday’s agenda. Investors are still processing a series of restrictive comments from those responsible at the Frankfurt institute.
Oil prices fall in Asian markets. WTI futures fell about half a percentage point below $73 a barrel after production at Libya’s largest oil field resumed after a three-week halt due to political protests. Libya’s National Oil Corp announced on Sunday the lifting of force majeure and the resumption of full production at the Al Sharara field, which can produce up to 300,000 barrels per day. Investors remained cautious about the risks of supply disruptions in the Middle East as Houthi attacks on shipping in the Red Sea continue. A US official said it would take some time before military action could prevent attacks in the region. On the demand front, both the IEA and OPEC recently forecast robust growth in global oil demand this year, thanks to strong fundamentals. Brent futures also fell 0.54% to $78.13 a barrel.
Asian stock markets mixed, Chinese stock markets poor
The Asian stock markets are mixed at the start of the week. Excluding Tokyo’s jump, driven by growing belief that the Bank of Japan will maintain its extremely accommodative policy at tomorrow’s meeting, China’s post-PBOC stock markets continue to perform poorly, with Hong Kong up 2.29% and Shanghai up 2.29% 1.79% fell Despite fears of economic stagnation, the central bank today left its benchmark interest rates unchanged. The Kospi in Seoul fell slightly, falling 0.11%.
Tokyo updates 34-year highs: +1.64%
The Tokyo Stock Exchange ended the first session of the week higher, reaching its highest level in 34 years as the U.S. stock market consolidated with purchases focused on technology. The Nikkei benchmark index was up 1.64% at 36,552.28, up 589 points. On the exchange rate front, the yen is weakening against the dollar, trading just below a level of 148 and at 161.30 against the euro.