Europe is getting hammered by inflation worries, rate hikes and the potential for a sovereign debt crisis, which is why Italy underperformed today.
Stoxx 600 -2.7%
UK FTSE 100 -2.1%
German DAX -3.1%
French CAC -2.8%
Italy MIB -5.0%
Spain IBEX -3.8%
European stocks had held up much better than US stocks since the March low, in part because of far less tech exposure and lower multiples. But then you get a day like today where Italian stocks cut through support in a 5% fall and it’s a reminder of the risks.
That’s a more stern footing by Japanese officials but I would argue that it is all still part of their verbal intervention playbook. The overall remarks are still more or less the same as when we saw USD/JPY broke above 120 and that shows the lack of alternatives in their toolkit. Any serious intervention in the market is still a bit of a reach if you ask me.
I’ll add more colour to the post if and when there are more details from the call. But presumably, this would mean during the September and October meetings. That considering that the ECB has already communicated their intent to only hike by 25 bps in July.
The U.S. Federal Reserve will hike its key interest rate by 50 basis points in June and July, with rising chances of a similar move in September, according to a Reuters poll of economists who see no pause in rate rises until next year.
All 85 economists in a June 6-9 Reuters poll predicted a 50 basis point federal funds rate hike to 1.25%-1.50% on Wednesday, after a similar move last month. Another such hike was penciled in for July by all but a handful of survey contributors.
condemn Iran’s actions in response to an IAEA board resolution, they say Iran aggravates the situation and complicate efforts to return to the nuclear deal
Iran’s actions exacerbate the situation and complicate efforts to restore full implementation of the 2015 nuclear deal.
Iran’s actions cast further doubt on its commitment to a successful nuclear deal outcome.
Background is that IAEA Director Grossi said Iran told IAEA it plans to disconnect 27 IAEA cameras as of today. Grossi says not restoring monitoring in the next 3 or 4 weeks could be fatal for the Iran nuclear deal.