The prospect of a 50 basis point rise in interest rates in May in the US once again stresses the debt markets
The European stock markets pick up the bearish witness that Wall Street left last night, with sharp falls in its main indicators, especially in the technological Nasdaq, after the president of the Federal Reserve (Fed), Jerome Powell, opened the door to a rise of interest rates of 50 basis points ahead of its next meeting in May.
In Spain, the Ibex-35 fell 1.84% at the close to 8,650 points, and finally dropped 0.5% for the week as a whole. This puts an end to a streak of three consecutive raises.
In this Friday’s session, only Red Eléctrica (+0.46%) and Telefónica (+0.12%) closed the session in ‘green’, while the biggest falls were presented by Ferrovial (-4.26%). ), Arcelormittal (-4.06%), Laboratorios Rovi (-3.85%), Inditex (-3.65%), Repsol (-3.51%), and Siemens Gamesa (-3.44%).
The leading role of the day, however, has been in the debt markets, where the real fear is that the most aggressive policy anticipated by Powell will continue over time and that in the following meetings the rate hikes will also be 50 points basics. Even some analysts like those of Nomura already speak in their reports of increases of 75 basic points in the next meeting of the monetary organization.
This perspective that has returned sales to the bond market, pushing down the price of the treasury (ten-year US bond) and triggering its profitability, which moves in the opposite direction. Specifically, the interest required on the reference is close to 2.938%. To put it in perspective, at the beginning of the year it barely exceeded 1.5%.
The tension is transferred to the debt markets in Europe, with the interest of the German bund at 0.95% (it started the year in negative), and the ten-year Spanish bond 1.88% (compared to 0.6 % in which it premiered 2022).
In the raw materials market, the price of a barrel of Brent crude, a benchmark for Europe, stood at 106.6 dollars, down 1.5%, while a barrel of West Texas oil was around 102 dollars.