The Ibex-35 speeds up in the falls, leaving 2.5% in new annual lows. The expectation of further rate hikes lowers confidence and puts the Euribor at 2.5% in the daily rate
The losses are being imposed on European stock markets on evidence that the acceleration of interest rate hikes by central banks is driving the global economy into recession. The Ibex-35 is picking up the witness of the declines on Wall Street, with losses already reaching 2.5%, pushing the chart of the selective below 7,600 points.
The largest decreases were presented by Solaria (-8.43%), Acciona Energía (-4.03%), Rovi (-3.5%), Acciona (-3.29%), Repsol (-2.96% ), Colonial (-2.92%) and Acerinox (-2.74%), while in green only Fluidra (+0.7%), Mapfre (+0.48%), Telefónica (+0.27% ) and Siemens Gamesa (+0.17%).
If the session ended this way, the ibex would break through the previous low of the year, marked at 7,644 points in the midst of the outbreak of the war in Ukraine. After four straight sessions down, the Ibex is adding a 4% drop this week, followed by losses for the second.
Investors are accelerating sales as data emerges showing a more than complicated autumn ahead for the economy. The last of these, that of eurozone private activity, which returned to contraction levels in September.
This is reflected in S&P Global’s monthly general purchasing index (PMI), at 48.2 points, from 48.9 in August, the lowest level in the past 20 months and again below the 50 mark that marks the divide between expansion and shrinkage.
“The eurozone is looming into recession as companies point to deteriorating business conditions and mounting price pressures, coupled with skyrocketing energy prices,” said S&P Global Market chief economist. Intelligence, Chris Williamson, who estimates a 0.1% contraction. of GDP in the third quarter.
The tension is much more apparent in the debt markets, where bond profitability skyrockets in the secondary market (which may be an indicator of what investors are asking states to buy their debt).
Investors dump their bonds, causing prices to fall and yields to rise, which moves in reverse. And the interest rate of the Spaniards up to 10 years already beats 3.177%.
But the most extreme case is still that of the United States: the yield on the 10-year bond has not reached its ceiling and has risen well above 3.76% on Friday, the highest level since 2010. The 2-year bond even above 4%, an indicator (when short bond yields are higher than long bond yields) that investors are pricing in a recession over the next 12 months.
The worst prospects currently in existence for Europe and in particular the fact that the European Central Bank (ECB) is one step behind the US Fed in withdrawing inflation-fighting incentives are putting the euro under renewed pressure on the foreign exchange market. The single currency doesn’t appear to be hitting the only one and, after losing parity on Wednesday, is trading this Friday at $0.9754, new lows in the past 20 years.
In the commodities market, the oil price fell by 2%, with a barrel of Brent, a reference in Europe, at around $88.62, while West Texas in the US is again close to $82.
Source: La Verdad