Stock market: Europe braces for a weak start ahead of tomorrow’s ECB meeting; Milan holds steady
Gas prices above 78 euros, oil prices on the rise
(Il Sole 24 Ore Radiocor) - European stock markets are set to open weakly, as markets await the European Central Bank’s Governing Council meeting, which, according to experts, is expected to announce a 25 basis point rise in the cost of borrowing to 2.5 per cent tomorrow. Economists are, however, speculating on the central bank’s future moves, given that high crude oil prices (up 1 per cent to $98.9 per barrel, whilst WTI stands at $93.82, up 0.85 per cent) and gas prices (+3 per cent to €78.1 per megawatt-hour) could push up European inflation. The focus remains on conflict zones, where tensions show no sign of easing. The countdown has also begun for the FOMC meeting – the Federal Reserve’s policy-making body – scheduled for next week. According to the CME Group’s FedWatch Tool, there is a 60 per cent probability that the central bank will raise interest rates by a quarter of a percentage point. The Eurostoxx futures contract is down 0.44 per cent. By contrast, the FTSE MIB futures contract is holding steady. Meanwhile, attention remains focused on government bonds, whose yields are at warning levels: the yield on the German 10-year bond stands at 3.38 per cent, whilst that on Italian bonds is at 4.17 per cent, with the spread remaining contained around 81 basis points. The ten-year US Treasury yields 4.79 per cent.
On the Milan Stock Exchange, all eyes will once again be on the banks in the run-up to Intesa Sanpaolo’s annual general meeting, which is set to give the green light to the capital raising operation to fund the takeover bid for MPS. As for the Siena-based bank, yesterday, as expected, non-executive directors Gianluca Brancadoro (independent) and Alessandro Caltagirone (non-independent) were co-opted onto the board. All eyes are also on the tech sector, on the day Apple is set to unveil its new foldable iPhone. Finally, TIM is under close scrutiny during the final days of the takeover bid launched by Poste Italiane, following the upward revision of the cash price per share.
In the currency markets, the euro stands at 1.1641 dollars (yesterday’s close was 1.163 dollars) and 178.15 yen (179.33), whilst the dollar-yen exchange rate stands at 153 (154.2), ahead of next week’s moves by the Bank of Japan, which could raise interest rates to defend the national currency. Gold is trading largely unchanged, with futures at $4,444 per ounce (+0.12 per cent), whilst bitcoin is trading at $78,154 (+0.9 per cent).
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