• June 5, 2023

The stock exchanges today, 9 June 2022. Time for the ECB: Lagarde ready to call the first rate hike

MILAN – 9:15 am. It’s time for big changes in the ECB house: squeezed between an economy that slows down due to the war in Ukraine and the price rush, as just outlined by the OECD, the Eurotower is preparing to announce the first rate hike (expected in July) and the end of the purchases of titles. Mix on the table of the governors, on tour in Amsterdam, who will also have to fire the new growth and price estimates. Based on these, outline the moves of the future: for now, the indication of the end of the purchases is expected (through the App program), while the real actions on rates are scheduled for next month. The goal outlined by the president is to reach zero interest rates (today we are at -0.5 for that on deposits) in the third quarter of the year: the market assumes that in July there will be the first squeeze: the hypothesis more accredited is a series of gradual increases from 0.25, but there is no shortage of “hawks” which also provide a squeeze from half a point in a single stroke as early as July.

The amount of purchases of the App program

The amount of purchases of the App program

Inflation estimates will most likely rise substantially. Unicredit expects them to reach around 7% for this year (from 5.1%) and that they can rise to 2% by 2024, if not beyond. These expectations accelerate tightening forecasts. According to Barclays, for example, the central bank will give a 0.25 point squeeze in each meeting from July to December, including a further hike in the first quarter of 2023. As for purchases, the stop should be enacted by the end. in June (or with a possible additional 5 billion euro for the first week of July). Also in Abn Amro they have accelerated the estimate of increases, which previously was for only two moves between July and September and now instead extends to the beginning of next year, as for the English bank, arriving to estimate rates at 0.75% in the first part of 2023. There are many obstacles on the way. Obviously, war will be a concern that Lagarde will take into account, as will the issue of energy prices and the food crisis. The reaction of the markets should not be underestimated. Precisely for this reason, in recent days, there has been talk of a “plan” that the ECB could adopt to try to keep the spreads of peripheral countries under control, in the event that the monetary tightening were to cause them to widen in a worrying way: on its side it has the weapon of flexibility in reinvesting the securities in the portfolio that come to maturity.

Pending these important decisions, the EU stock exchanges are moving downwards: starting up Paris loses 0.56%, Frankfurt leaves 0.60% on the ground while London drops by 0.44%. Milan was also weak, losing 0.66%.

There is also expectation on the markets for data on consumer prices in the United States, which will be released tomorrow and which the White House has already said it expects “high”. The secretary to the Treasury, Janet Yellen, said 8% inflation is “unacceptable”. Weak futures up Wall Street, fresh from a lower close as 10-year Treasury rates rose above 3%. Today the spread between German BTPs and Bunds is down slightly to 210 points while theEUR it is little moved: the single currency is trading at 1.0712 against the dollar (1.0715 last night in New York).

Asian stock exchanges moved weakly: Shanghai lost 0.76% e Shenzhen 1.81%. They discounted the lockdown decided in Shanghai charged to 2.7 million residents, which overshadowed the data on Chinese exports stronger than expected in May (+ 16.9% with a trade surplus of 79 billion). Close just above par for Tokyo with the Nikkei index gaining 0.04% to 28,246.53 points.

Prices of Petroleum little movement on the Asian markets. WTI crude oil rose 29 cents to 122.40 per barrel, while crude oil gained 35 cents at 123.93 dollars per barrel. The impact of inflation has worsened since the Russian invasion of Ukraine, leading to increased pressure on energy and food prices. US crude oil prices rose 2.3% yesterday, up 63% for the year, while wheat prices rose 39% in 2022. The price of oil was essentially unchanged.gold on the Asian markets this morning. The metal with immediate delivery is quoted at 1,851 dollars an ounce, with a variation of -0.08%.

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