Political continuity in Italy and Portugal pleases the stock exchanges, but debt interest continues to rise
The city’s Monday seems to be one of the solutions in Italy and it seems to have this decision to Milan investors, to the good performance policies of the Lisbon Stock Exchanges.
In Italy, the solution of the Mattarela-Draghi duo, that is, the continuation for another presidential term of Sergio Mattarela in conjunction with the Government headed by Mariohi Draghi, was followed by a political appreciation of the stock market, with the MIB index rising by 0.94% .
In Portugal, the majority of the Socialist Party with an absolute victory in the early parliamentary elections on Sunday, is allowing António Costa to form a third government without a mandate due to the pressure of the so-called gering, the two parliamentarians to his left, BE and PCnça 0.0% index.7% of overall losses,7% weighted from 0.970% of PSI gains and 0.97% on PSI-27 main quoted). Reuters dubbed Costa Costa as “this second of balanced public accounts”.
The gains in Milan and Lisbon contrasted with the weaker rises in Dublin, Brussels, Paris and Vienna and the very mediocre result in Madrid (0.035% in the Ibex 35). However, Helsinki, Amsterdam and Athens recorded gains above 1%. The Dax index in Frankfurt, the euro zone’s main financial hub, rose 0.99%.
Debt market does not depend on domestic policy
In the public debt market, there is an upward trend in procedures, pressured by a dynamic that goes beyond the domestic context of each country (and its political solutions). It derives from the perspectives that investors have regarding the economic policy of the European Central Bank (ECB), which meets next Thursday. Market expectations point to a faster tightening in 2022, which has already been announced by Christine Lagarde and which, for now, has the support of the majority of the central council.
The press conference of the ECB presidency next Thursday will be particularly scrutinized after the internal opposition meeting (revealed in the minutes of the last December meeting) and the confrontation at the Eurogroup meeting with the German Finance Minister, the liberal Lindner, according to the German magazine Spiegel. The ECB meeting ends the day after Eurostat’s first estimate for inflation in the eurozone in January is released.
Portuguese and Italian 10-year bond rates rose on Monday on the secondary market, continuing their upward trend in January. Interest rose 0.65% on Portuguese bonds and 1.36% on Italian bonds. In just one month, with a 10-year term, interest rates rose from 0.485% to 0.65% on Portuguese bonds and from 1.19% to 1.36% on Italian bonds.
The designation for December in the 10-year term point to 1.25% for Portuguese debt and 2.23% for Italian debt, according to the animal of the financial portal World Government Bonds.
The dynamics of rising interest rates are being fueled by global and eurozone inflationary pressure. Although inflation in the euro zone in January will only be known on Wednesday, some partial data from some countries have already been identified for increases, such as that of Portugal, of 2.8% in December 3 , 3% this month, and others for declines during this period – from 5.3% to 4.9% in Germany and from 6.5% to 6% in Spain.