Thursday, September 28, 2023

European stock markets opened the week with US and ECB inflation higher

She DAX increased by 0.5%, to 15,823.15 points, the FTSE -100 rose 0.5%, to 7,520.02 points, the CAC 40 increased by more than half a percentage point, the Eurostoxx 50 increased by 0.5%, to 4,257.45 points and the FTSE MIB The session started from 28,433 points, after registering an increase of 0.7%. The Ibex 35 woke up this Monday with an increase of 0.61% to 9,421.60.

Among the leading stocks of the session, Intesa Sanpaolo rose more than 2%, to 2.4660 euros. BBVA rose by 1.7%, to 7.085 euros, and Prosus rose slightly by 1.7%, to 64.15 euros.

Siemens shares reacted negatively, falling more than 1%, to 135.55 euros, SAP lost 0.3% while Adyen fell 0.14%, to 737.90 euros.

Session without macro references. The inflation outlook in the US and the ECB

Today will be a day without many macroeconomic references, where industrial production in Italy and consumer inflation expectations in the United States will be published.

On Wednesday, US inflation for the month of August will be announced, a relevant reference for the meeting of the Federal Open Market Committee (FOMC) on the 19th and 20th of this month. “Investors assign a very low probability, less than 10%, that the Federal Reserve (Fed) will raise its reference rates at the aforementioned meeting, a possibility confirmed by the latest statement of the FOMC members, since most of them rejected a rate hike in September,” said Link Securities experts.

If inflation “surprises” to the upside, the bond and stock markets will respond negatively. On the contrary, if this variable meets expectations – the total remains stable at 4.3% and the underlying fell from 4.7% in July to 4.3% in August – or “improves” the consensus projections of those analysts, the markets will respond favorably.

This Thursday The markets depended on the statements of Christine Lagarde, president of the ECB at the organization’s monthly meeting. The question for investors at the moment is whether the ECB will choose to stop its rate hike process or whether, on the contrary, it will raise rates again for the tenth time in a row. The best thing for the markets, they say at Link Securities, is that “the ECB did not raise its official rates and that it “left the door open” to not do it again if inflation will continue to fall, although we are giving this potential scenario a small chance.” It should also be noted that, since this is the last meeting of the quarter, the ECB will announce its new macroeconomic picture for the Eurozone, where we expect to change the inflation up and the economic growth of the region down, something which, if confirmed, will increase the likelihood of a potential entry into stagflation in the Eurozone economy in the short / medium term.

After closing higher on Wall Street indices, futures traded higher. The Dow Jones rose 0.2%, to 34,651 points, the S&P 500 It rose only three tenths, to 4,472.50 points, and the NASDAQ 100 advanced only half a percentage point, to 15,358.20 points.

Asian stock markets closed the session with a mixed tone. The Nikkei lost 0.4%, to 32,475 points, the Shanghai index added 0.8%, to 3,142 points, the Hang Seng lost 1.2%, to 17,975 points and the Kospi added 0.2%, to of 2,556.88 points.

Oil prices fell in the Asian market as concerns about the Chinese economy weighed on the outlook for fuel demand, although Brent remained above $90 a barrel, supported by a supply cut after Saudi Arabia and Russia to increase supply cuts. Brent oil futures lost 0.17%, to $90.50, while West Texas Intermediate lost just four tenths, to $87.08.

The Euro Dollar rose 0.3%, to 1.0733 dollars. Meanwhile in the cryptocurrency market, Bitcoin rose slightly to $85,862.5 and Ethereum was down 0.6%, to $1,616.40.

In the debt market, bonds are sold for less. The Bund yield rose to 2.6305%, the ten-year Spanish bond saw its yield rise to 3.668% while the T-Note yield rose to 4.294%.

Nation World News Desk
Nation World News Desk
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