(Il Sole 24 Ore Radiocor) – The ECB ends the era of zero interest rates and European stock exchanges They are falling, as are Treasuries, although the news was in the air as spreads flare. Piazza Affari was among the worst (MIB FTSE), but all indices lost more than a percentage point on a selling day in all sectors: insurance, utilities and telecommunications limited the damage.
Ce Governing Council of the European Central Bank it decided to end quantitative easing on July 1 and announced the first rate hike in 11 years for the next meeting. The increase will be 25 points, while the extent of the September surge will depend on the outlook for inflation, which remains “a major challenge”. In which new estimates sees inflation at 6.8% in 2022, 3.5% in 2023 and 2.1% in 2024, while lowering GDP estimates for 2022 to +2.8% and 2.1% in 2023 increase in 2024 to 2.1% in 2024. The single currency rises, selling on government bonds.
The ECB changes phase: first rate hike in July
“The ECB – comments Carsten Brzeski, Global Head of Macro at Ing – has just announced the end of a long era. But if it’s also the start of a new era with ever-higher interest rates, that’s it. other than some”. “On the one hand, recession fears and well-known debt levels in some major member countries are to be expected to slow rate increases, but on the other hand, it is not unlikely that ‘in the current inflationary environment, the central bank will keep an eye on rising prices, even at the cost of a recession, which would explain the rise in interest rates and spreads once morest lower-rated countries than we saw at the conference,” adds Giorgio Broggi, quantitative analyst at Moneyfarm. According to other experts, the surge in government bond yields and the gap with the BTp Bund nearly 330 pointscomes with the disappointment of those who were already anticipating a plan to limit financial fragmentation by limiting peripheral spreads.
Wall Street down following unemployment benefits
Wall Street scores fall following disappointing unemployment insurance claims in the United States. The number of employees who applied for the first time unemployment insurance, up 27,000 to 229,000 in the week ended June 4, according to Labor Department data; Expectations were for a figure of 210,000. Futures contracts had already lost momentum following the decisions of the European Central Bank. Investors remain concerned regarding the outlook for growth, inflation and rising government bond yields. CPI scheduled for release on Friday June 10: analysts expect an 8.2% rise in May, with basic data – those adjusted for food and energy prices – pointing to an increase 5.9% compared to 6.2% in April
In the meantime, the titles of Tesla Sell: UBS raised its rating, saying the electric car maker’s stock might rise more than 50% from current levels. Target also performed well following announcing a dividend increase; This decision follows a disappointing quarterly report and a profit warning for the second quarter.
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