Stock market: Europe weak as attention turns to Trump-Xi and bond yields; Milan down 0.2 per cent
Stellantis down; Campari and Banco Bpm up
(Il Sole 24 Ore Radiocor) - European stock markets opened lower today, on the day that US President Donald Trump is due to hold face-to-face talks in Washington with his Chinese counterpart Xi Jinping, who arrived overnight and was personally welcomed by the tycoon at the airport. Although US Treasury Secretary, Scott Bessent, has already announced that the US and China have agreed to extend the trade truce by two months, pushing the deadline back from 10 November to 10 January, market participants remain cautious, not least in light of the tensions that emerged during the UN General Assembly. On that occasion, the Iranian President, Masoud Pezeshkian, delivered a speech taking a hard line against the United States, whilst reiterating his willingness to engage in dialogue, as the American delegation walked out of the chamber. Xi Jinping, meanwhile, decided not to attend the meeting in New York. Consequently, yesterday, the price of crude oil began to rise and today it continues to climb, albeit only slightly: Brent is trading at $103.85 per barrel (+0.7%), whilst WTI stands at $92.72 (+0.62%). Investors are also concerned about the heavy selling that has hit both US and European government bonds. Yields on 10-year Treasuries yesterday once again exceeded the 5 per cent threshold, rising to around 5.13 per cent – levels not seen since 2007. In Europe, the 10-year Bund is yielding 3.55 per cent, the BTP 4.5 per cent and the French government bond 4.639 per cent. The sell-off in bonds, both in Europe and the United States, was triggered primarily by the PMI indices, which highlighted the strength of the economy. In the US, in particular, indicators for the services and manufacturing sectors exceeded expectations, fuelling expectations of a possible interest rate hike by the Federal Reserve as early as October. According to the CME Group’s FedWatch Tool, the probability of a 25-basis-point rise has climbed to over 73 per cent, up from 55.4 per cent the previous day and 8.8 per cent a month ago. Consequently, Wall Street closed lower yesterday. In early trading, Milan and Frankfurt were down 0.2 per cent, Paris 0.4 per cent and Madrid 0.35 per cent.
On the Milan Stock Exchange, Stellantis fell by 1.2 per cent on the day that Acea released its figures for European vehicle registrations in August, which showed that the group underperformed the market: a year-on-year increase of 3.5 per cent, compared with an overall increase of 5.3 per cent.
Campari (+1 per cent) and Banco Bpm, the latter up by 1 per cent, stood out, with the market speculating on the bank’s future as it is the subject of a bidding war between France’s Crédit Agricole and Banca Mps (inv). Oil shares are performing well, with Eni up by around half a percentage point. Cucinelli is holding its ground, following the presentation of its new collections during Fashion Week. In Paris, EssilorLuxottica gained 0.8 per cent, following the announcement that it is stepping up its efforts in the field of artificial intelligence-enabled eyewear.
On the foreign exchange market, the euro is trading at 1.1388 dollars and 180.43 yen, whilst the dollar-yen exchange rate stands at 158.43. Bitcoin has fallen by around half a percentage point, slipping to 84,000 dollars.
