2023-06-26 14:22:00
Last week ended with a resurgence of economic fears sparked by thecontinued rise in interest rates. Central banks are not letting up in their crusade against inflation, and rising financing costs threaten to further weaken economic growth.
These macro fears have not yet been allayed, aggravated on Friday by the slowdown registered by the eurozone composite PMIinvestors start the week with an additional factor of uncertainty. Wargner Group Rebellion, although brief, putsRussia again in the focus of the markets. Analysts agree that Putin’s image has been weakened, and that the movement of the Wagner group reflects a growing internal division in Russia that until now has been hidden by the Moscow authorities. Fear is now focused on what Putin’s reaction will be to try to restore the image of unity in the country.
Waiting to see if the withdrawal of the Wagner group, now in exile in Belarus, has immediate consequences on the course of the war in Ukraine, the operators of thePetroleumthey react with timid bullish threats. The Brent barrel, a reference in Europe, recovers US$74, while in the United States the West Texas-type barrel is close to the level of US$70. Analysts, in addition to citing the additional doses of geopolitical uncertainty, point out that the eventual adoption of martial law in Russia, to stem possible protests, could affect its crude exports.
Anxiety has been mounting in equity markets since central banks, determined to quench inflation, will continue to raise rates and risk crashing fragile economies. The S&P 500 faltered and was little changed after the gauge suffered its worst week since March, while 10-year Treasury yields fell toward 3.7%. In the technological the Nasdaq fell 0.3% and the Dow Jones 0.1%.
The B’seuropean olsas is carried away by sales. European bond yields plunged as the Stoxx Europe 600 Index fell 0.1%, after losing support at 460 points, extending the declines to a sixth day, the longest losing streak since October. Germany’s benchmark 10-year yield fell four basis points as data showed business prospects deteriorated to the lowest level seen this year as Europe’s largest economy struggles to emerge from recession.
The first clues about the behavior of the equities after the weekend, those coming from Asia, have had a negative bias. Japan’s Nikkei closed with cuts of 0.25%, while the MSCI Asia Pacific fell 0.2%. Also inChinathe falls have reached 1.4% in its return to activity after a long festive bridge, in the midst of a wave of reductions in forecasts for the Asian giant’s GDP. The latest firm to reduce its forecasts for the growth of the Chinese economy in 2023 has been S&P, by cooling its estimates from 5.5% to 5.2%.
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