EU stock exchanges and Wall Street, the race continues with eyes on US inflation. Milan at the top for 11 months

Brazil, stock market down slightly, sales on real after assault on Congress

The São Paulo Stock Exchange opened its first session slightly down after the assault on Congress and the buildings of power in Brasilia by thousands of supporters of the former President of the Republic, Jair Bolsonaro. The reference index IBovespa is down by 0.2% after gaining 4.6% in the previous three sessions. Instead, the local currency is losing ground against the dollar and the euro: the real is trading at 5.27 for a dollar against 5.22 (-0.85%) on Friday evening and at 5.65 for a euro against 5 .54 (-1.6%) last Friday.

Euro strengthens, gas also rises

On the exchange rate front, the euro strengthened against the dollar, changing hands at 1.0682 dollars (from 1.0599 dollars at Friday’s close). The currency also stands at 141.47 yen (140.44), while the dollar/yen exchange rate is at 132.43 (132.49).
The value of gas is also growing: the February future is worth 72.97 euros per megawatt hour, an increase of 4.9%.

China reopens borders, change of course on Covid

China has decided to reopen its borders from Sunday. The new strategy against Covid by the Beijing authorities is underlined by the Chinese newspapers: “life goes on again” writes the official newspaper of the Chinese communist party in an editorial. China has indicated that as of January 8, the victims caused by Covid are just over 5 thousand but according to the World Health Organization, China significantly underestimates the infections and international experts estimate one million deaths by 2023. The elimination of The quarantine obligation for international flights, however, takes place in a phase in which the connections between China and the rest of the world are minimal compared to those of 2019, the pre-pandemic phase. There were 245 international flights in China on Sunday, including departures and arrivals, which compares with 2,546 flights on the same day in 2019 (-91%). China estimates a 70-75% recovery in domestic tourism revenues this year.

Oil accelerates with new policies from Beijing

Oil accelerates with investors encouraged by China’s turnaround in anti-Covid policy, which, according to analysts, could favor mobility in the country and, therefore, consumption of crude oil in the world’s largest importer. WTI futures in February jumped by 3% to 76.3 dollars a barrel, those of Brent maturing in March by 3% to 81 dollars. “The reopening of the Chinese economy is playing an important role in changing the outlook for oil demand, which appears to be recovering. At the same time, the end of the zero-covid policy eases fears of a severe global recession, while the dollar is expected to weaken further, weighed by expectations of a less aggressive Federal Reserve», explain the ActivTrades analysts, underlining that «with the improvement of the prospects for oil demand and the weakening dollar, there may be room for further increases in the price per barrel».

Stock markets rise in Asia, Tokyo closes positive

Asian stocks were up sharply as the MSCI emerging markets index entered a bull market phase, recovering more than 20% from its October lows. The prices are driven by the reopening and support for the economy taken decisively by Beijing and the bets on a slowdown in the Fed’s monetary tightening, after last Friday’s data saw the ISM index enter a phase of contraction and wages cool down. Tokyo, Sydney and Shanghai closed up 0.6%, Shenzhen up 0.7%, Seoul up 2.6% while Hong Kong advanced 1.9%.

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EU stock exchanges and Wall Street, the race continues with eyes on US inflation. Milan at the top for 11 months

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