European stock exchanges await the highs for the two-day Fed summit, from which the market awaits confirmation of the current ultra-accommodative monetary policy on Wednesday. Investors thus maintain their positions on equities, while US Treasuries slide, whose yields have risen to 1.46%. The Milanese FTSE MIB is gaining ground along with the other main lists, supported by purchases on energy stocks and banks. Among the Milanese stocks with the highest capitalization, Saipem continues to benefit from recent contracts and the rise in oil prices. Atlantia also did well, after the signing of the sale of Autostrade per l’Italia to the Cdp-Fondo consortium put an end to a factor of uncertainty that had weighed on the title for three years now. Weak instead Ferrari.
On the foreign exchange market, the euro / dollar barely moved to 1.2107 (1.2101 on Friday). The single currency is also worth 132.77 yen (132.83), while the dollar / yen ratio is at 109.68 (109.78). The price of oil is on the rise, reaching its 32-month highs thanks to the growth in global demand: last week the International Energy Agency predicted a return in demand to pre-Covid levels next year, inviting producing countries Opec + to maintain the balance of the market by increasing production. July WTI futures rose 0.44% to $ 71.22 a barrel, while August Brent delivery gained 0.45% to $ 73.02.
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From inflation to the Fed
The inflation theme continues to dominate the markets. Last Thursday the US rose by 5%, the highest level in the last 13 years. This should have scared the markets. But no: the stock exchanges updated their historical records in the US and US yields also fell last week with a movement (-13 basis points) that had not been seen for a year. Reason: the stock exchanges are betting on the fact that inflation is temporary and that it does not change the policy of central banks. In Europe last Thursday the ECB confirmed this thesis. This week it’s the Fed’s turn, which meets on Tuesday and Wednesday.
(Il Sole 24 Ore Radiocor)