After three weeks of interruption due to the invasion of Ukraine, Moscow Square activity has resumed, but only Russian Federal Government bonds are processed while the stock market will remain flat. Piazza Avary ends with the Ftse Mib index rising 0.3% to 24,294 points. The yield on Italy’s 10-year BTP closed at 2.006% according to Bloomberg, the highest since the end of April 2020. Fitch lowered Italy’s GDP estimate
The Moscow Stock Exchange reopened today after three weeks of suspension due to the invasion of Ukraine. But since this morning, only Russian Federal Government bonds are trading while the stock market is still up. Russia’s bonds, according to reports BloombergTrading resumed after the central bank pledged to buy government debt to increase liquidity and help stabilize the financial system. Russia’s 10-year government debt yield fell by 44 basis points to 11.84%. European stock exchanges closed uncertainly, oil prices soared (All updates live – The private). Italian 10-year BTP yield closed at 2.006% according to the platform Bloombergthe highest level since the end of April 2020. The spread between the treasury product and the German Bund increased from 151 basis points at the start to 154 at the end of the session.
performance of European stock exchanges
Ukraine, from Apple to Coca Cola: companies leaving Russia
In Europe, investors’ attention is still focused on the effects of the war in Ukraine, but also on the trend in commodity prices affecting inflation. Stock markets on the Old Continent closed with no specific direction in the first session of the week: London closed 0.4% higher, with Amsterdam up 0.2%. Both the Paris and Frankfurt stock exchanges decreased by 0.5%, and Madrid negative by 0.2%. Positive session on the Milan Stock Exchange: The Ftse Mib index closed 0.3% at 24,294 points.
Ukraine and Russia threaten Italy: what are the possible consequences
Oil prices accelerated further after a bullish start to the day. Not only the repercussions of the war between Russia and Ukraine, but also the tension arising from the attacks in Saudi Arabia to give wings to prices. Indeed, the world’s largest oil producer has warned that attacks by Yemeni rebels against the kingdom’s oil facilities pose a “direct threat” to global supplies. Brent North Sea rose 6.1 percent to $114.55 a barrel, and West Texas Intermediate crude jumped 5.5 percent to $110.48.
Asia is shutting down
Asian stock exchanges, Tokyo orphans closed for holidays, the first session of the week recorded poorly. Also in this case, the effects of the war in Ukraine by Russia are weighing on the markets while concern remains high for fears of a new wave of infections from Covid-19.
Fitch lowers global GDP estimates
Istat: worrying inflation in Italy. And it won’t go down any time soon
Meanwhile, Fitch has lowered its global growth estimate as inflation flares and Russia’s invasion of Ukraine. Global GDP this year is expected to grow by 3.5%, or 0.7 percentage points lower than the previous forecast, while growth in 2023 is expected to be 2.8%, -0.2 points. Eurozone GDP fell 1.5 percentage points to 3% in 2022, while growth in the US fell 0.2 percentage points to 3.5%. Fitch says global growth prospects have “deteriorated significantly as the challenges posed by inflation and Russia’s invasion of Ukraine intensify, threatening global energy supplies”. Russia provides about 10% of global energy, and a jump in oil and gas prices will increase costs for industry and real consumer income, Fitch explains, projecting that the inflation rate in the eurozone will average 5% in 2022. United Russia has less energy but the rise in oil prices adds that it is already becoming a problem,” notes Fitch, predicting seven Fed rate increases in 2022. Inflation challenges and energy shocks could have a greater impact on GDP growth “if they were to launch A rapid Fed tightening has pushed oil prices to $150 a barrel for the long haul, and when linked to large-scale energy rationalization in Europe.
As part of its downward revision to global growth forecasts, Fitch also “significantly lowered” estimates for Italy, whose GDP will grow by 2.7% in 2022, compared to the 4.3% projected before Italy’s invasion of Ukraine by Russia. The rating agency explains that the scissors “largely reflect the effects of the war in Ukraine and the associated effects on inflation and the supply chain, along with weaker growth forecasts in the first quarter of 2022 due to the variable Omicron. For these reasons we expect the Italian economy to reach levels of some before the pandemic only in the third quarter of 2022.” Fitch states that Russian gas accounts for about “a fifth of Italy’s total primary energy consumption”, the highest among the four major economies of the eurozone, and therefore our country is “particularly vulnerable to rising natural gas prices and any supply disruptions”. The rating agency raised its year-end inflation forecast by 2.1 percentage points to 3.1%: “This will reduce consumption while real purchasing power is also constrained by weak wage growth.”