MILANO – The European stock exchanges opened down and worsened during the morning on the fears of the spread of the Delta variant in Europe and in the aftermath of the indications coming from the minutes of the Fed, which showed that according to some board members the conditions for starting a tapering of Quantitative easing have been “somewhat centered earlier than anticipated”. However, the markets did not read in the reports of the works of the FOMC, the monetary policy arm of the Fed, excessively “hawkish” tones from the bank.
Monetary policy was also at the center of the European scene with the ECB announcing the revision of its monetary policy strategies. Among the most important and expected changes, the abandonment of the inflation target “near or below 2%”. The Eurotower is now aiming for a “symmetrical” 2%, meaning that “the Governing Council considers negative and positive deviations from this target equally undesirable”.
The expectation of investors is instead turned towards Frankfurt this afternoon, where Christine Lagarde will present the new monetary policy strategies of the ECB, revising in particular the inflation target from “close to but below 2%” to 2%.
Since the morning, the European indices have been falling sharply, weighed down by fears for the spread of the Delta variant. Milano loses 2.7%, London l’1,94%, Frankfurt 1.75% e Paris 2.2%. The new Chinese squeeze against hi-tech companies bends the Asian markets: in particular Hong Kong suffering, which sells i. 2.6% and Tokyo which closes at -0.88%.
Among the currencies, there was little movement for the euro. The currency is trading at 1.1798 dollars at the start of the day (1.1789 last night in New York) while on the yen the single currency changes hands at 130.5. The spread is slightly up: the differential between BTP and German Bund opens slightly to 102 basis points, compared to 104 points at yesterday’s closing, with the yield of the Italian 10-year falling to 0.72%.
Truce for the Petroleum after the fluctuations of the last few days: the Texas WTI thus still falls fractionally compared to last night’s values just above 72 dollars a barrel at 72.02 (-0.2%) the Brent at 73.38 dollars (-0, 07%).