EU stock markets cautious, anticipation for the Fed rises. Saipem collapses in Milan

#stock #markets #cautious #anticipation #Fed #rises #Saipem #collapses #Milan

Finance

by Laura Bonadies and Giorgia Colucci

Governor Powell will announce his rate decision on January 31st. Euros up 1.08. Oil rises with tensions in the Middle East. Spread in the 150 point area

3′ reading

(Il Sole 24 Ore Radiocor) – European stock markets are moving in moderately positive territory, in a key week in which investors’ eyes are focused on the meetings of the Federal Reserve (Wednesday 31 January) and the Bank of England (Thursday 1 February ), as well as unemployment numbers in the United States. In Piazza Affari, the FTSE MIB is rising but held back by the collapse of Saipem, Generali made little move on the occasion of the investor day, with the Leona group announcing the launch of a new 500 million buyback plan.

Waiting for Fed and EU GDP

The Federal Reserve is not expected to proceed with a rate cut, but the market awaits indications on what will happen in the next meetings, when a softening of monetary policy is almost taken for granted. On the European front, the market is betting that the ECB could decide to cut rates as early as April; the probability of this happening is given at 87%. The spotlight will also be on the quarterly season which comes into full swing in Italy and reaches its peak in the United States where the technological giants (Apple, Amazon, Microsoft Corp and Alphabet) are called to the test of accounts. As regards macro data, pay attention to the European GDP data for the fourth quarter estimated at +0.3% on an annual basis) and the data on American consumer confidence in January. The Jolts Report on December job offers is also arriving at 10am (4pm in Italy).

Saipem down after Morgan Stanley report and plant accident

Saipem is ballasted by a Morgan Stanley report according to which the Saudi Arabian government has decided that Saudo Aramco maintains maximum oil production capacity at 12 million barrels per day, canceling the 2020 directive which provided for an increase to 13 million. Also noteworthy is the news of an accident at the Woodside plant in Australia, with which the company had signed a contract in 2022. According to rumors, the Castorone gas pipeline installation vessel lost control of the materials it was installing off the Pilbara coast , forcing the evacuation of workers and damaging the plant.

Iveco Group stands out on the Ftse Mib. The banking sector is tonic with Banco Banco Bpm, Intesa Sanpaolo and Banca Mps. Sales also on Moncler and Brunello Cucinelli.

Euro close to 1.08, oil rises

On the currency market, the exchange rate between the euro and the dollar is close to 1.08 (1.0806 on the day before). Meanwhile, the single currency trades with the yen at around 159. Oil on the rise with Brent Crude March aiming for 83 dollars a barrel and the WTI above 77. Price of natural gas falling in Amsterdam below 28 euros per megawatt hour.

Spread around 150 points, 10-year yield decreasing

Yields still falling in the Eurozone in the wake of statements made by the governor of the Bank of France, François Villeroy de Galhau, on the probable cut in interest rates by the ECB this year supported government bonds. The yield differential between the 10-year BTp and the German Bund of the same maturity remains stable in the 150-point area.

Tokyo on the rise, in China focus on Evergrande

The Tokyo Stock Exchange concluded the session with a slight increase (+0.11%), following the record set on Wall Street, with purchases focusing on the technology sector. Shares in property developer China Evergrande Group, the world’s most indebted real estate company with over $300 billion in debt, remained suspended from trading after a Hong Kong court ordered the company to be liquidated due to insolvency. Other real estate companies led the decline in Hong Kong, where the benchmark Hang Seng index fell 2%. The ruling did not weigh on Chinese stock markets, galvanized by the monetary stimuli of the People’s Bank decided to breathe new life into the Dragon’s economy.

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