Weak start to the week for the European stock exchanges awaiting indications from central bank leaders and a new wave of quarterly accounts. The market expects further rate increases of 25 basis points from the Fed (Wednesday 26 July) and the ECB (Thursday 27 July) and will focus on the statements of the top management of both institutions to understand whether the current bullish cycle can be considered over. On Friday, however, the Bank of Japan is expected to leave its ultra-accommodative policy unchanged. Black shirt of the day Madrid, which is weighed down by political uncertainty following elections that have not assigned clear government majorities: the Iberian index drops 1.17%. More contained decreases for Frankfurt (-0.19%), Paris (-0.29%) and Amsterdam (-0.32%). Here the price lists in real time.
The Ftse Mib of Piazza Affari marks -0.5%, but weighed down by the coupon detachment of, among others, Enel and Pirelli, which account for 0.3812%. Among the main Milanese stocks, Recordati (+1.35%) continues to benefit from the agreement with GSK announced last Friday. Diasorin also did well (+0.69%), while Monte dei Paschi di Siena lost share (-2.37%).
Negative start to the week also for the prices of sovereign government bonds traded on the Mts electronic market. An undifferentiated drop in prices was recorded with the spread between the BTPs and the Bunds confirming itself at the levels seen on Friday. After the very first trades, the yield differential between the 10-year benchmark BTP (Isin IT0005518128) and the German bond of the same duration indicated at 161 basis points, the same level as the closing on 21 July. The drop in prices pushes yields upwards: the 10-year benchmark BTP yields 4.09% from 4.06% at the final on Friday. The Spanish Bonos show no particular reactions to the expected victory of the people in the political elections which, however, did not give a clear majority to the sides in the field. The 10-year Bonos benchmark (31/10/2033) yields 3.45% with a spread over the Bund of 101 basis points. Here the trend of the spread in real time.
Euros, oil and gas
On the foreign exchange market, the euro changed hands at 1.1127 dollars from 1.1122 at Friday's close. The single currency is also worth 157.29 yen (from 157.51), while the dollar/yen ratio is 141.38 (from 141.65). On the energy front, the price of oil dropped slightly: the September delivery contract on Brent dropped 0.48% to 80.68 dollars a barrel and that of the same expiry on the Wti dropped 0.49% to 76.69 dollars. Lastly, the price of natural gas in Amsterdam increased by 1.4% to 28.5 euros per megawatt hour.
The Asian and Pacific stock exchanges start the week in no particular order, awaiting - they too - the decisions of the Fed, the ECB, Hong Kong and the Central Bank of Japan on rates. In the first two cases, no surprises are expected with respect to the expected increase of 25 basis points. Tokyo gained 1.23%, Taiwan 0.02% and Seoul 0.72%. Sydney (-0.1%) is down, Hong Kong (-2.4%), Shanghai (-0.19%), Mumbai (-0.34%) and Singapore (-0.67%) are still open. Semiconductor manufacturers Advantest (+2.76%) and Tokyo Electron (+2.41%) sprinted on the Tokyo market. The major exporters Honda (+1.85%) and Toyota (+1.6%), Sprint by Mitsubishi (+4.99%) were positive. Minus sign for bankers Mitsubishi Ufj (-2%), Mizhuo (-1.29%) and Sumitomo Mitsui (-1.16%), in contrast with Nomura (+1.76%)