The opening of the week in the markets continues to be marked by nervousness before the Federal Reserve meeting tomorrow and on Wednesday and the massive sales of shares, bonds and other risky assets. The Ibex lost almost 2%, with all banks in sharp decline and Bankinter and Banc Sabadell losing close to 5%. In the rest of Europe, the worst performing is the Paris Stock Exchange, with Milan and Frankfurt very much on a par. They are all around 2% down.
The data on inflation in the United States, which on Friday confirmed that it is at an unbearable 8.6%, can only lead to a forceful reaction from the Fed and that scares everyone: with higher rates, the chances of a sudden stop of the economy or a recession. This morning, according to data compiled by Reuters, the market discounts that in the next three Fed meetings there will be two rate hikes of 50 basis points (0.5%) and one of 75 points. It could be, precisely, this week. The last time the Fed raised rates by 75 points in one fell swoop was in 1994.
Today not only the bag suffers. The massive sale in the bond market is accentuated as well. Risk premiums – an added concern for the ECB, along with inflation – are rising, as in the worst times of the debt crisis of the previous decade. The one from Greece is close to 290 points. Italy, which is the third largest economy in the euro, is at 240 and Spain, much better, but rising, is around 130 points. The fragmentation of the eurozone, Christine Lagarde’s workhorse, is hitting the market just as the ECB’s net debt purchase program is coming to an end.
In this context, bitcoin suffers beautifully. In the first hours of the day, more than 8% slides down a slope with an uncertain end. It has lost about two-thirds of its value since last November’s high, when it touched $67,000. At the edge of 11 in the morning, it was passing through 24,300…
