THE financial markets have been at the mercy of volatility this week, with investors wondering about the next moves of central banks, after the minutes of the September meetings of the Federal Reserve and ECB were published, when their respective directors launched a lowering of the cost of money. Tensions in the Middle East also contributed to keeping stock prices in check. Meanwhile, today the quarterly reporting season begins in the States, with the numbers of the big banks: Blackrock, JPMorgan, Wells Fargo.
What the Fed and ECB minutes said
From the minutes of the last meeting of the Federal Reserve, the one in which an interest rate cut of half a percentage point per year was decided 4.75%-5%, it emerged that a “substantial majority” was in favor of a 50 basis point rate cut and all were in favor of a rate cut, the first in four years. Nearly all meeting participants felt that the risks to achieving employment and inflation targets were “more or less in balance.” In light of the progress on inflation and the balance of risks, “all officials agreed that easing the monetary policy stance was appropriate.” However, the minutes showed some disagreement on the extent of the cut in the cost of money, although in the end only one member of the FOMC (Michelle Bowman) voted against because she would have preferred a 25 basis point cut. The next meeting is scheduled for November 6-7, immediately after the US presidential elections and also a few days after the publication of data on the US labor market, which performed better than expected in September.
The ECB Minutes hThe flexible approach of the Board and the data-based and meeting-by-meeting approach to monetary policy were confirmed. French Central Bank Governor Francois Villeroy said the ECB would likely cut rates again at its meeting on October 17 because economic growth was weak and this increased the risk that inflation would not reach the 2% target. .
The macroeconomic scenario
On the macroeconomic front, the data has taken a backseat to global developments, particularly due to the volatile situation in the Middle East. The sharp slowdown in orders to German industry, published this week, has fueled concerns about the economic trend. Across the pond, US inflation fell to 2.4% in September, just above the expected 2.3%. This better-than-expected figure, combined with last week’s strong U.S. jobs report, will likely fuel the debate over whether the Federal Reserve should opt for a moderate interest rate cut next month or maintain its stance.tion after the significant reduction in September.
However, inflationdespite coming in slightly higher than expected, remains on a downward trajectory, suggesting that a 25 basis point cut is still likely at the next meeting.
New rush for silver: UPB sees increases up to 38 dollars an ounce
In September the price of silver rose further the 32 dollars an ounce, the highest level since 2013. The factors behind this sharp increase were multiple. First, explains Peter Kinsella, Global Head of Forex Strategy at Union Bancaire Privée (UBP)the Federal Reserve’s higher-than-expected interest rate cut was a constructive development for precious metals; Subsequent statements from the Fed confirmed that it will continue to reduce the interest rates. Secondly, other major central banks have reduced interest rates, which is again very positive for silver. Third, China has announced a series of stimulus measures that include targeted support for the real estate sector and lower interest rates. China’s announcement of stimulus measures could be a game-changer for silver as it will lead to an increase in asset prices of risk in the coming months. THEThe correlation of silver with this type of asset, explains the analyst, is well known and the generally constructive prospects for gold now make silver’s high beta compared to the yellow metal more evident. Longer term, “we believe silver could rise to levels around $38 per ounce, which would be consistent with historical gold-silver relationships.”
Among others commodities, oil prices are rallying again, with the barrel of Brent returning to above 79 dollars. For days, prices have been hit by fears of worsening and repercussions for the sector from the conflict in the Middle East, after Iran’s missile attack on Israel. The arrival of the hurricane season also contributed to pushing prices USA.
The changesor euro/dollar ccontinues to remain almost stable, a sign that the markets believe in fewer cuts in the coming months and in a growing economy.
The weekly performance of the stock markets
The palm of the rises in this rather volatile week, it was conquered by the Milanese stock exchange with the FTSE MIB index bringing home an increase of 3.4% followed by Frankfurt which gained 1.8%. Rises of over 1% were achieved by Paris, while Madrid recorded a +0.88%. London remains behind, losing half a percentage point. Wall Street is also preparing for a positive ending, with American indices rising by around 2%.
The best and worst in Piazza Affari
Among the best titles of the week, it is worth mentioning BPER which leads the increases (+19%) after having unveiled the plan for 2027 which promises more profits and a sharp increase in shareholder remuneration. The surge in the shares of the Emilian bank supported on the one hand Unipol (+10.6%), which has a shareholding of almost 25% between shares and options, and on the other the entire banking sector: MPS (+11%), Banco BPM (+6%) and Unicredit (+6%). On the downside, the following are positioned: Technoprobe which slips by 2%, followed by Inwit (-1.9%) and Leonardo (-0.8%).
