FRANKFURT (Dow Jones) — The European stock markets recorded significant losses on Tuesday afternoon. The DAX loses 1.0 percent to 15,770 points, the Euro-Stoxx-50 falls by 1.0 percent to 4,260 points. The global increase in yields is having a particularly negative effect. The market expects the US Federal Reserve to take an even more aggressive stance on fighting inflation, with four interest rate hikes this year now considered a deal. There are a few who do not rule out the possibility that the first interest rate hike could go up by 50 basis points, while the vast majority assumes an increase of 25 basis points.
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The yields on Bunds are also on the rise. The strategists at Commerzbank consider it possible that the market interest rates for federal bonds with a term of 10 years will break the zero percent mark for the first time since April 2019 and return to positive yield territory. These are currently yielding minus 0.032 percent.
Brent oil price at highest level since 2014
Brent oil is more expensive than it has been for over seven years. A barrel cost $88.13 at its peak. On the one hand, analysts see growing global demand due to easing concerns about the negative economic effects of the highly contagious omicron variant of the coronavirus as the cause of the price increase. At the same time, concerns about geopolitical tensions are growing, which is also driving prices higher.
The latest price spike came after Yemen’s Houthi rebels claimed responsibility for attacks in Abu Dhabi that resulted in a fuel tank explosion. As a result, concerns grew on the markets about the security of oil supplies from the Gulf region, which is rich in raw materials. The sector of European oil stocks is the daily winner with a plus of 0.7 percent.
Earnings season is slowly heating up
Even before the earnings season really gets going, expectations are falling. For market strategist Lale Akoner of BNY Mellon Investment Management, the focus is on margin pressure: “Wages are rising, energy costs are still very high, so inflation will weigh on margins. That will definitely be reflected in profits in 2022.”
In terms of individual stocks, Rio Tinto presented somewhat weaker production figures for the fourth quarter. The shares lose 0.4 percent. Iron ore exports from Australia fell 3 percent year-on-year and even 5 percent in the quarter. The analysts at Jefferies believe that the company’s future profit development will depend entirely on costs and price developments.
Hugo Boss has also presented the first key data. The fashion manufacturer slightly exceeded expectations, with Group EBIT for 2021 at EUR 228 million, above market expectations of EUR 210 million. The stock is down 0.2 percent after doubling over the year.
At Siemens, the sale of the road traffic technology subsidiary Yunex plays no role, the shares fall as a DAX heavyweight by 1.8 percent. Yunex was sold to the Italian infrastructure group Atlantia for 950 million euros. Atlantia was in a serious crisis when a motorway bridge in Genoa collapsed.
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Stock index last +/-% absolute +/-% YTD
Euro Stoxx 50 4,259.59 -1.0% -42.55 -0.9%
Stoxx 50 3,798.26 -0.9% -32.73 -0.5%
DAX 15,769.62 -1.0% -164.10 -0.7%
MDAX 34,070.77 -1.5% -516.52 -3.0%
TecDAX 3,491.95 -1.9% -66.09 -10.9%
SDAX 15,617.66 -1.6% -256.09 -4.9%
FTSE 7,566.40 -0.6% -44.83 +3.1%
CAC 7,122.37 -1.1% -79.27 -0.4%
Fixed income market last absolute +/- YTD
German ten-year return -0.03 -0.01 +0.15
US 10-year yield 1.81 +0.02 +0.30
FOREX last +/- % Tue 7:40 a.m. Mon 5:31 p.m. % YTD
EUR/USD 1.1386 -0.2% 1.1400 1.1406 +0.1%
EUR/JPY 130.60 -0.1% 130.88 130.69 -0.2%
EUR/CHF 1.0419 -0.1% 1.0433 1.0425 +0.4%
EUR/GBP 0.8363 +0.0% 0.8358 0.8355 -0.5%
USD/JPY 114.69 +0.1% 114.82 114.57 -0.4%
GBP/USD 1.3613 -0.2% 1.3639 1.3653 +0.6%
USD/CNH (Offshore) 6.3565 +0.1% 6.3465 6.3521 +0.0%
Bitcoin
BTC/USD 41,793.28 -0.7% 42,273.28 42,348.31 -9.6%
ROHL last VT-Settl. +/- % +/- USD % YTD
WTI/Nymex 85.03 84.30 +1.4% 1.21 +13.1%
Brent/ICE 87.53 86.48 +1.2% 1.05 +12.3%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,813.99 1,819.55 -0.3% -5.57 -0.9%
Silver (Spot) 22.92 23.23 -1.3% -0.31 -1.7%
Platinum (Spot) 974.56 976.50 -0.2% -1.94 +0.4%
Copper Future 4.40 4.43 -0.5% -0.02 -1.5%
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DJG/thl/ros
(END) Dow Jones Newswires
January 18, 2022 07:05 ET (12:05 GMT)