A year ago, the Ftse Mib in Piazza Affari rates were to 22,500 points (today it is under 25% compared to those values). The price of oil was at 46 dollars per barrel (not far from the current 46,5 but up 64% compared to minimum of February). The euro area inflation was at 0.1%, much lower than 0.5% today. The yield of the BTp to 10 years was to 1.76%, the same as the one touched on yesterday.
Excluding the performance of a Business incubator (which was affected by the excessive weight in the index of the banks that have suffered from the introduction of bail-in) the quotations of securities of the State and oil are reported on the same levels of 12 months ago. The recovery in the price of oil – which in February had dropped to $ 28 – drove up inflation and, especially, predictions on how it will move in the future the level of prices. Currently, these projections – derived from the index 5y5y Eurozone, which expresses the expectations of the markets about inflation in the euro area in 5 years (and for the next 5) – are built up to 1.5% fee, 20 basis points compared to last month (when they were at 1.3%).
sales on The bond and the (premature) return to normalcy
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This helps to explain in part how ever since a few weeks the managers are lightening positions in government securities with yields that are going going to incorporate a scenario of inflation-producing different. The sales are generalised and not specific to the BTp. But the ten-year Italian is certainly among the most affected, because burdened by the uncertainty related to the outcome of the constitutional referendum on 4 December. The BTp has touched 1.8% (with a spread on the Bund to 158 points to a puff of air from 161 touched after the Brexit), a fact that seems unbelievable when you consider that a month ago was to 1.15% and in August went very close to breaking to the downside the barrier dell'1%. In the last month, the Italian yield rose over 60 basis points. A movement similar to that of the uk Gilt(the yield rose 60 basis points to 1.28% in) due to an increase in inflation in the United Kingdom. The other major government bonds of the Eurozon e (10-year) have seen rates climb an average of 25 basis points. Of the same measure with which they are recovered, the yields of us securities that they are going to incorporate, quite simply, a rise in interest rates in the Usa in December, just 25 basis points.
In the Eurozone, however, where it is still in the plan, the monetary expansion of the Ecb (at least until march 2017, but the markets are expecting an extension to December) of a rise in interest rates is too early to talk about it. Therefore it is clear that investors are prezzando expectations of a rise in inflation. But this is not inflation good and lasting (that which would result from an increase in wages, which, in turn, would have an impact on consumption, confidence of the future and investment), but of the bad one and momentary (the technique, imported, oil).
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At the same time, the investors do not want to stay with the cerino access in hand, that on government securities, which to many has seemed like a bubble. Not the case with the sales of October, the share of government securities in the euro area "investment grade" with a performance of negative market fell to 45% compared to 49% in the previous month. With regard to the corporate bonds "investment grade", the share of those with negative yields fell to 23 from 27%. As for downhill, it is in every case a percentage of the bull. And more than one, now that is approaching the end of the year – and maybe there is also the desire to monetize the good earnings offered by the market is selling.
The Bags, however, after the great month of October began badly in November. Piazza Affari yesterday lost 1.3% (in line with the other lists). Approaching the rise in U.s. rates, and then the new bonds in fact are becoming more competitive compared to the dividends offered by shares. But above all, yesterday the financial markets have received with concern the latest polls, which tell of a resounding recovery of the Trump in the polls to presidential elections scheduled in a week to be exact.
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