The fear of a recession in the Eurozone has turned into a certainty and this is pushing investors to reduce their positions in European equities. At the same time, great pressure is being exerted on the government bond market. The yield on Greek 10-year headline exceeded 4.64%, reminiscent of the 2017-2018 memorandum period, with the spread against the German one soaring to 253 basis points.
After yesterday's a flurry of interest rate hikes by central banks due to inflation, stock market indices in the Eurozone and in Britain fall sharply, discounting a 2-month recession in the European economies.
This was preceded, of course, by the big drop in oil prices, which indicated that industrial production would be reduced worldwide.
At the same time the futures of the US markets are sharply down further worsening the stock market sentiment.
Drop over 2% in the European markets
In the European markets, shortly after 14.30 local time
- the DAX falls by 2.5% to 12,216 points,
- the French CAC (-2.21%) at 5,786 points
- the pan-European Eurostoxx 50 was down 2.55% and
- the Italian MIB was falling (-3.22%) to 21,112 points.
The British FTSE 100 is retreating (-2%). At the same time, the yields of European and US bonds are moving strongly upwards.
Central banks around the world (except Turkey) are raising interest rates to deal with the problems of the inflation.
The XAA loses 800 points
The international retreat in the stock markets also affects the Greek stock market, with the General Index retreating towards 798 points, losing the 800 points level and retreating (-2.2%).
The transaction value at 14.40 was still low at EUR 32 million but no one knows how it will play out by the end of the meeting.
The FTSE Large Cap index was down (-2.46%), the Mid Cap index (-1.86%).
Among the individual sectoral indices, banks (-3.9%), food and beverages (-2.32%) and technology stocks (-2.17%) recorded large losses.
Heavy pressure on bonds - Greece's yield above 4.6%
The pressure on government bonds is significant, with yields reaching historic highs. The yield on the Greek 10-year bond topped 4.64% (+14 basis points compared to Thursday)) with the spread over the German bond at 253 basis points.
