MILANO – The clouds over the European economy continue to multiply. The fears of recession and the ongoing price trend linked to the war are now being joined by signs of tension coming from the United Kingdom. The maxi tax plan announced by the new premier Liz Truss it was greeted with great concern by international markets and observers, causing the pound to plummet to all-time lows and British bond yields to the upside. An acceleration that forced the Bank of England to intervene with a temporary purchase of securities. In the background, the energy crisis continues to cause concern, after the possible sabotage of the Nord Stream gas pipeline, with gas rising again yesterday, while a fourth leak was identified in the morning.
The news from Germany is not comforting, with inflation reaching 10% in September, the highest since 1951. The stock exchanges thus end a day in sharp decline: Milan loses 2.4% at the end after coming to sell over 3%. The other EU lists are also bad. It fares better in Asia, where Tokyo files trades at + 0.95%.
Closing down sharply for the European stock exchanges
Definitely negative closing for the main European stock market indices. The Dax 30 in Frankfurt lost 1.70% to 11,976.46 points, the Cac 40 in Paris 1.53% to 5,676.87 points. The London Ftse 100 is also clearly below par, which marks -1.77% at 6,881.43 points. The Ibex 35 in Madrid also fell sharply, dropping 1.89% to 7,301.47 points.
Piazza Affari at -3%
Piazza Affari sinks and loses 3%, returning, like the pan-European Stoxx 600 index, to the lowest since November 2020. Crolla Mps, with the stock in volatility auction (-16%) and the capital increase being made increasingly complicated, Stellantis (-5.8%) and Pirelli (-5.6%) also sink, with the cars being the worst sector in Europe. The other lists of the Old Continent are also bad, with Frankfurt losing 2.3%, London 2.2% and Paris 2.1%, in the wake of the Wall Street debacle, where the Nasdaq loses 3.1% and the S&P 500 2.3% and the Dow Jones 1.94%.
US subsidies, decline beyond expectations
Requests for unemployment benefits in the US fell: in the week ending 24 September they decreased by 16,000 units to 193,000, which is the lowest since April. The Department of Labor reports it. Expectations were for 215,000 requests.
Gas down after the German maxi plan
The price of natural gas in Europe falls again and is positioned at the lows of the session at 185.5 euros per megawatt hour (-10.5%) after the announcement of the new aid package in Germany between 150 and 200 billion aimed at curb gas prices. “We import gas from other countries, we use the capacities of many ports in the east and north, our stocks are 90%”, said Olaf Scholz at a press conference in Berlin, explaining that “the coal plants continue to operate” , while two of the last three nuclear power plants “continue to work until April 2023”.
EU, consumer confidence plummeted in September
In September, the confidence of European consumers in the economic outlook recorded a new decline of 3.5 points “hitting the lowest level ever”. This is what emerges from the data on the performance of the ESI index released today by the EU Commission. Overall, the ISI – which measures the economic sentiment of industry, consumers, services, trade, construction – recorded drops of 3.5 and 3.6 points respectively for the EU as a whole and for the Eurozone. For Italy, the decline in the ESI was 3.7 points, the same as in Holland and only lower than that of Germany (4.8 points).
Germany, inflation towards new rises
The German economy will still suffer from the energy price crisis and high inflation. Inflation will rise from an average of 8.4% in 2022 to an average of 8.8% in 2023. This was announced today at a press conference in Berlin by the leaders of the major German economic institutes, presenting their report “Energy crisis : inflation, recession, loss of wealth “. Only in 2024 will the 2% threshold be “gradually reached again”.
The European stock exchanges are weighing down
European stock exchanges continue to decline sharply after a weak start, despite the positive close of Wall Street that yesterday interrupted the series of six sessions in a row in a decline. Fears of geopolitical tensions and an impending global recession weigh on the lists. Europe’s economic prospects remain extremely uncertain even in light of the ongoing energy crisis, exacerbated by gas leaks in the Baltic Sea and the approach of winter. About an hour after the start of the 1.9% contrl’1, the Dax drops 1.93% and Paris 1.76%. Milan scores -1.72%
Stable spread at 240 points
The spread between BTP and Bund opens stable at 240 points. Stable, the yield of the Italian 10-year rises to 4.6%, compared to 4.5% at yesterday’s closing.
Pound still falling
The pound lost more than 1% against the dollar after yesterday’s intervention by the Bank of England. The British currency is worth $ 1.0775, having previously fallen to 1.0763.
Oil in decline
Oil prices are down this morning. The American WTI fell by 0.8% to 81.49 dollars, while the Brent listed in London was down by 0.76% to 88.64 dollars a barrel.