Bags today March 23 | Europe on par after the Fed’s mini-rate tightening

A slow start for the European stock exchanges in the aftermath of the Federal Reserve’s decision on rates and on a day in which investors’ attention is always focused on central banks. Yesterday, as expected, the Fed raised the cost of money by 25 basis points, reaching 4.75%-5%, the highest level since 2007. The president of the Faith, Jerome Powell, has promised another rate hike in 2023 and said it does not expect a first cut by the end of this year. Today a new round of macro data will arrive from the US, with particular attention to weekly jobless claims. As for central banks, three appointments are scheduled today: the Bank of England is expected to raise rates by 25 basis points to 4.25%, after yesterday’s UK inflation data was still very high, the Swiss National Bank is expected to aim for a 50bps hike to 1.5%, when the Norwegian central bank is expected to step in again with a 25bps hike to 3%.

European stock exchanges

In Piazza Affari, the Ftse Mib moved on parity (-0.02%), as in Paris the Cac40 (-0.04%), when in Frankfurt the Dax40 recorded a -0.1% and in London the Ftse 100 opened down by half a percentage point. On the eve of Wall Street, after an initial positive reaction to the central bank’s move, it closed in the red, also affected by the words of the Treasury secretary, Janet Yellen, who denied the hypothesis of extending the federal guarantee of all bank deposits, without limits.

Business Square

Looking at Piazza Affari, among the starting points of Inwit (+4.46%), on the press rumors regarding the fact that the French fund Ardian is probing with JP Morgan the possibility of proceeding with a private takeover operation. Mps (+1.36%) and Poste (+1%) also did well with the other banks also recovering: Bper +0.55%, Unicredit +0.47%. On the other hand, Italgas (-1.27%), Cnh and Diasorin both down by 1%. As reported by the Only 24 Hours, Snam (-0.04%) would have reached an agreement to amend the Italgas control syndicate agreement between Snam itself and Cdp Reti in order to allow some specific hypotheses for the transfer of the Italgas stake held by Snam. Outside the main segment, Risanamento leapt (+5.74%), after the agreement for the sale of Santa Giulia (real-time performance at this link). The Btp-Bund spread moved little at the opening of the day. The differential moves to 184 basis points as at yesterday’s closing. The Italian 10-year yield down slightly to 4% (real-time variation at this link).

Asian bags

calm has returned to the Asian markets where stock exchanges are overall positive, as are futures on Wall Street, after the decidedly weak closing of the American indices in the light of the 0.25% rise in rates, in line with expectations, decided by the Fed. The weakening of the dollar reassures area investors on the idea that it could help insulate at least the emerging countries from the global banking turmoil. While Tokyo ends slightly lower (-0.17%), Hong Kong is ahead (+1.9% per session still open) thanks also to Tencent’s exploits for the positive results. Good Shanghai (+0.64%) and Shenzhen (+0.62%), more cautious Seoul (+0.31%). During the day, the decision of the Bank of England on rates is expected, as well as that of the central banks of Switzerland and Norway.

Currency exchange and energy

On the foreign exchange market, the euro strengthens to 1.0905 dollars from 1.0791 at yesterday’s close). The single currency is also worth 142.7905 yen (143.161), while the dollar/yen ratio is 130.913 (132.668). As regards the price of oil: the May delivery contract on Brent slips by 0.31% to 76.45 dollars a barrel and that of the same expiry on the Wti by 0.47% to 70.57 dollars a barrel. Finally, in Amsterdam the price of gas rose by 2.5% to 41 euros per megawatt hour.