Bets: OAT eased by risk appetite, BTP improved – 08/03/2022 at 19:33

( – Stock market indexes rise again with +2.5% on the Nasdaq (at 12,650), which crossed the +2,000 mark, recovered from the low of 10,600 on June 16 (+19%) and + 1600 points from July 14 (+15% without consolidation for 3 weeks).

The S&P500 at 4160 is also up 16% from mid-June lows and up 12% over 3 weeks.

Risk appetite has returned sharply since mid-July, with little impact on fixed-income markets, all of which were expecting the Fed to ease its monetary policy from the end of the first half of 2023.

This hope was somewhat dampened by very “hawkish” speeches in the face of inflation from three members of the Fed in 24 hours: after Charles Evans (Chicago Fed) and Mary Daly (San Francisco Fed), it is with James Bullard (FED St. Louis) to confirm , that firm and decisive action against inflation in the United States must continue.

Mary Daly believes that after peaking, rates should remain at their peak “for some time” to extinguish the last embers of inflation.

US T-Bonds are trending up +4 points to 2.781%, although the “numbers of the day” are mixed in the United States, primarily with the worst: US private sector activity contracted in July for the first time since June 2020, according to the S&P Global Composite PMI, which finally stands at 47.7 (revised from 47.5 in the previous estimate), after 52.3 in the previous month.

A pleasant surprise, however, was the increase in orders for US industry by +2% (according to the Commerce Department, they increased by +1.8% in May).

In Europe, yields tend to rise in the absence of major statistical data or announcements from the ECB: this is probably one of the consequences of the current one-sided arbitrages in favor of stocks.

Our OATs were down +5 points to 1.43%, Bunds +8.5 points to 0.886%, Italian BTPs down -3.5 points to 3.005 (spread narrowing to +212 from Bund vs +250 10 days ago).

For its part, Germany returned to a trade surplus in June, according to Destatis, at 6.4 billion euros, after a deficit of 0.8 billion the previous month.

The Federal Statistics Office explains that this return to positive territory is the result of a 4.5% increase in German exports, well above the slight increase in imports of 0.2% compared to May.

But it’s not all good news: this morning investors learned of a decline in the S&P Global composite PMI in the Eurozone.

Activity there slowed from 52.5 in June to 51.7 in July, reflecting a third straight month of contraction in private sector growth, the slowest pace since April 2021.

The final so-called “composite” index of overall activity in the region came in at 49.9 last month, down from 52 in June, marking the first decline in activity since February 2021.

Industrial output recorded its biggest contraction since May 2020, while activity continued to pick up in the services sector, but at the slowest pace in six months.

“Very high inflation in Europe is clearly having a negative impact on demand, with both service providers and manufacturers reporting greater customer reluctance to place orders,” said Joe Hayes, senior economist at S&P Global.

The trend is identical in the eurozone’s private sector, the index in question also fell sharply in July, as a surge in inflation dampens an expected recovery in consumption after the lifting of health restrictions, monthly PMI surveys showed on Wednesday.


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