Strong rise in the yields of government bonds in the euro area. German 10-year bunds rose above 2% for the first time since 2013, an increase of 6 basis points from yesterday. The Italian BTPs are also uphill, a ten-year pays the 4.32% with an increase of 17 points. The spread, i.e. the yield differential between the two securities, thus widens to 230 points. The French ten years yield 2.59% (+ 7 points), the Spaniards 3.16% (+ 6), Greek stocks 4.55% (+ 9). The rise in yields means that the value of the bonds it’s decreasing. Basically, bond sales exceed purchases and equilibrium is re-established at lower price values. It sells because official interest rates are rising as the outlook for economic growth they worsen. Recession fears sink oil which loses 5.4% a 85.6 dollars a barrel.
Current yields remain negative in real terms being well below average euro area inflation. The euro is still losing value, losing 0.75% against the dollar, remaining below par. Stock markets also fell with drops of over 2%. In New York the S & P500 falls 2.2% like the Nasdaq. Milan among the worst, lost 3.3%. The strongest drops are for Tenaris (- 8.1%), Leonardo (- 6%) and Iveco (- 3.9%). Amplifon is the only positive stock. Frankfurt closed – 2%, Paris – 2.3%. London lost 2%. The new British government led by Liz Truss presented a tax cut plan from 45 billion poundswithout however clarifying the doubts about possible coverages. The pound lost 2.4% on the dollar reaching the lows of 37 years old.