Dusseldorf On the big day of expiry on the futures markets, the Dax stabilized: About half an hour after the start of trading, the leading German index was up 0.5 percent on Friday at 13,102 points.
On Thursday, the Frankfurt stock exchange barometer recorded its biggest daily loss in more than three months. It collapsed by 3.3 percent to 13,036 points due to renewed fears of a recession triggered by interest rate hikes in the USA, Switzerland and Great Britain.
According to Dekabank, in addition to inflation and rising interest rates, cuts in gas supplies from Russia are also playing an increasingly important role. “Concerns about gas rationing in autumn and winter and thus the likelihood of a recession are increasing,” says the institute.
According to Jochen Stanzl, chief market analyst at CMC Markets, the final sell-off is still pending. “Although the prices have fallen sharply and the volume has also increased, they are not noticeably strong,” says the strategist. After today’s price recovery, it is therefore not yet possible to speak of a bottom.
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The US was also in a sell-off, with the tech-heavy Nasdaq falling more than 4% on Thursday, the broader S&P 500 slipping 3.3% and the Dow Jones falling 2.4%.
Friday has the potential to be a volatile trading day because today is the Witches’ Sabbath, also known as the “big day of expiry”. On the third Friday in March, June, September and December, many futures transactions expire at once on the stock exchanges worldwide.
Options and futures on indices and individual stocks expire. Stock prices typically fluctuate widely because investors want the prices of the securities on which they hold derivatives to move in a direction that is favorable to them.
In addition, stockbrokers are turning their attention to European inflation data this Friday. On the basis of an initial estimate, the European Statistical Office assumes inflation of 8.1 percent in May compared to the same month last year. Today the authority publishes the final data for the euro area. The European Central Bank (ECB) sees price stability with long-term inflation of around two percent. In order to curb inflation, she announced a few days ago a first rate hike in July.
In the USA, figures for industrial production are on the agenda this Friday. Analysts are predicting a slowdown in growth to 0.4 from 1.1 percent.
Relief rally in southern European bonds
Bond investors are reacting positively to comments by ECB President Christine Lagarde on plans to limit spreads. They grab Southern European bonds and push the yields on ten-year titles from Italy, Spain and Portugal to 3.75 percent, 2.836 percent and 2.623 percent, respectively.
Reuters reports, citing insiders, that the head of the central bank explained the recently announced so-called “anti-fragmentation tool” to euro-zone finance ministers behind closed doors. It should be used when the spreads between the bonds of individual countries exceed a certain threshold. However, she did not give any details.
Yen still under pressure
The euro is holding above the $1.05 mark this morning. The common currency traded at $1.0517 in early trade, down slightly from the night before. The ECB had set the reference rate significantly lower on Thursday afternoon to exactly $1.04.
The yen continued to depreciate after the Japanese central bank announced that it would stick to its ultra-loose monetary policy despite high inflation. One US dollar in the morning costs 134.11 yen. The Japanese currency is only slightly above its 24-year low.
>>> Read also: Yen falls to 24-year low – experts warn of further fall
After the two-day meeting, the Bank of Japan (BoJ) decided to leave its main monetary policy levers unchanged. Short-term interest rates are to remain at minus 0.1 percent and long-term rates at around zero. The BoJ is also sticking to its purchases of government bonds and shares.
Nevertheless, the Japanese Nikkei index in Tokyo fell by 1.5 percent to 26,027 points on Friday. According to the analysts at DBS Bank, the decisive factor on this trading day was renewed fears of recession as a result of the largest interest rate hike since 1994 in the USA.
Look at the individual values
“Rising natural gas prices weigh on the European economy”
Delivery Hero: The shares of the Dax company rose by 2.6 percent to make up for part of the approximately ten percent loss on Thursday.
XSray: Advances in US approval of leukemia drug give XSpray its biggest share price jump in nearly a year. The pharmaceutical company’s shares rose by a good 14 percent in Stockholm. The US health authority FDA granted the drug orphan drug status, which lowers the hurdles for approval.
Befesa: The shares of the industrial recycler are traded this Friday with a dividend discount of 1.25 euros. Compared to the previous day’s close of 54.00 euros, this means a minus of 2.3 percent.
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