Everything is ready for one of the dates of the summer. The president of the Fed, Jerome Powell, will take the floor this afternoon (tomorrow in the US) from that kind of summer colony for central bankers that is the Jackson Hole summit. Powell will give clues to the next steps of the institution to try to tackle inflation and with a dollar stronger than ever in its cross against the euro, all this one day after the US officially entered a recession.
Investors’ attention is therefore on the other side of the Atlantic. And it seems that everything that happens before Powell speaks, in the last bars of the placid agostil, is garbage minutes. Wall Street closed yesterday with increases of more than 1% and the European stock market is trying to join these increases. The Ibex has started the day with a rise of around half a percentage point, which allows it to recover 8,200 points. A rise similar to that recorded by the rest of the European parks.
However, as happened on Thursday, the rebound has gradually lost consistency. Investors do not find too many incentives to bet on purchases. And, in the middle of the session, the Ibex is listed in tables, like the rest of the large European indices. And it makes him shipwreck in a new assault on 8,200 points.
And that the increases in the Ibex are backed by the heavyweights of the index. In the first place, banking is listed in the green and Banco Sabadell, with close to 2%, is the best value in the selective. Bankinter, CaixaBank, Santander and BBVA add up to around 1%. Energy companies are also trading on the rise, with Acciona Energy adding another 1%. In the falls, Cellnex, Meliá and Rovi stand out, losing more than 1%.
It seems discounted that the ECB will raise the price of money again in September. The key is knowing how much. Although futures are beginning to price in a hike of up to 100 basis points, the central bank’s minutes published on Thursday, which surprised the market by its aggressive tone in controlling inflation above all else, seemed to point to a rise in 50 basis points is in line with its policy of gradualism. The spirit of the Fed, according to the governor of Atlanta, is to raise the price of money by at least 75 basis points. This could give even more fuel to the dollar, which, pending Powell’s words, remains stuck slightly above parity with the euro.
The ECB itself put its feet on the wall with this policy of raising rates and recognized in the document that it could lead to a debt crisis, for which it has activated the free reinvestment plan for bond maturities. An instrument with which it is investing the money of the German or French debt that expires in Spanish and Italian bonds, to try to contain the risk premiums of these two countries. However, in the ECB they are beginning to consider when to start to stop reinvesting the bonds of their excellent balance sheet, of 3.3 trillion euros, which expires, according to Archyde.com. A decision that will not take place until several rate hikes are made, according to information from this agency.
These words of the institution still have no correlation in the bond market. The Spanish 10-year bond maintains its profitability below 2.5%, with the risk premium at 118 basis points.
Energy prices, for their part, continue to rise, after Russia has once again cut off the flow of natural gas to Europe and Saudi Arabia has shown signs of wanting to reduce crude oil production. Thus, Brent adds more than 1%, and settles above 100 dollars.