MILANO – European squares closed with a cautious rise: Milano partly in the red, then held just above par to close at + 0.23%. Interpump stands out on Piazza Affari, after the acquisition of White Drive Motors. Mention also for H-farm which collects 6 million from the sale of Depop and hits the stock market. Minimal variations also in the rest of Europe: London advances by 0.1%, Paris 0.25% e Frankfurt by 0.1%. Few changes, therefore, for the pan-European Stoxx 600 index which has just retouched its highs. Wall Street he gains a little more conviction in the rise, after the first few bars: when EU trade ends, the Dow Jones rises by 0.3% and the Nasdaq by 0.22%.
The rush of oil and fears of expensive raw materials
The protagonist of these hours is the Petroleum, which for the first time in two years closed trading (Tuesday evening) above 70 dollars a barrel – after having also passed the 71 level – in the wake of Opec + decision to confirm the policy of gradually increasing the offer. In fact, since April, the cartel led by Saudi Arabia and extended to Russia has set itself the goal of increasing production by 2.1 million barrels: a program confirmed yesterday until July. There will be a new summit at the beginning of that month, to set the steps from August onwards.
With the recovery underway, analysts are not afraid of an oil oversupply, even in light of a thaw between the US and Iran that could lead Tehran to flood the market with its barrels, but on the other hand the agreement on nuclear power still seems to be in the future. The Brent quality, the reference for crude oil for the European market, at the end of the day rose by almost 1 percentage point to 70.9 dollars a barrel, after yesterday’s rally that led it to exceed $ 71, while the WTI remained above $ 68, up 1%. Just the rise in energy prices rather, it is what worries observers, because it is capable of driving inflation upwards in general and because it is accompanied by a rush of raw materials – from aluminum to copper, passing through foodstuffs – which is sending supply chains into a tailspin. global companies creating many headaches for companies: that grain of sand in the mechanism of recovery capable of derailing the entire economic machine. On this point, theOECD today certified a jump in inflation in April to 3.3%, the highest since 2008, precisely due to the boost in energy prices, which increased by 16.3%. On the other hand, food inflation slowed, from 2.7 to 1.6 per cent. Even the EU Commissioner, Paolo Gentiloni, has dealt with it by predicting a “peak of inflation in 2021”, but “it will be transitory” because we are different from the US.
Stock markets and the Turkish lira
The Tokyo Stock Exchange, this morning, it closed up 0.46% at 28,946.14 points. Although Japan last week extended anti-Covid tightening measures until the end of the month, investors are looking with confidence to the signs of recovery and the acceleration of the vaccination plan fuels expectations of a reopening of economic activities. Car company stocks hit new highs buoyed by rising global demand. To weigh in general on the recovery outlook, as yesterday’s data on the American ISM showed, are the risks of interruption of supply chains due to the scarcity of raw materials and components and also the mismatch between supply and demand of work, with some companies struggling to find despite unemployment has increased with Covid. The day in Asia was however mixed, with Shanghai (-0,86%) e Hong Kong (-0.64%) weak closing.
Investors are awaiting the US job report on Friday which may give some more indication of the state of the world’s leading economy. An ‘appetizer’ arrives today with ADP data limited to the private sector, along with the Beige book of the Federal Reserve which could give some indication of the countermeasures to the Central Bank study on the risk of price increases. Backlash in April of retail sales in Germany: they fell by 5.5% monthly (increase of 4.4% annually), yielding more than expectations which were -2%.
On the currency front, yet another case should be noted Erdogan-Turkish lira: the president has again targeted the central bank and its independence, calling for cuts in the cost of money and even indicating the summer months as a time to start lowering rates. The effect: Ankara’s currency depreciated by about 3%, exceeding 8.8 against the dollar. Closing slightly downeuro on the dollar which has strengthened from a minimum of 5 months due to good macro data that could lead the Fed to a normalization of monetary policy. The single currency changes hands at 1.2207 (-0.05%) while gaining against the yen at 133.79. Dollar advancing on the Japanese currency at 109.6 (+ 0.11%). The spread between BTPs and German Bundsfinally, it drops to 107 points with a ten-year yield of 0.89%.