European stock markets plunge, oil breaks through $100 and the spread rises to 118 points

Piazza Affari closed down 2.21%, at 50,237 points, with the financial sector among the hardest-hit segments of the session. The move comes within a broader context of tension on global bond markets: the yield on the 10-year US T-Bond rose to 5.33%, its highest level since 2002.

At the same time, the spread between Btp and Bund, the differential that measures the risk premium required on Italian debt relative to German debt, reached around 118 points. This is a level that signals growing caution among investors toward Italian public debt, at a time when benchmark yields in the United States are pushing up the cost of money on a global scale.

On the energy front, the price of oil rose above $100 a barrel, amid persistent geopolitical tensions in the Middle East and inflationary concerns on a global scale — a dynamic that, on the market front, runs alongside news of instability in the Strait of Hormuz, which the newspaper is following separately on the geopolitical front. Oil above the $100 mark raises energy costs for businesses and households and complicates the task of central banks, already grappling with bond yields at decades-long highs.

A portfolio manager at Janus Henderson described the pressure on yields as follows:

“The rise in yields has been unstoppable in recent months” — Helen Anthony, Portfolio Manager, Janus Henderson

The available sources do not specify which segments of Piazza Affari, besides the financial one, contributed most to the decline, nor what share of the oil price rise is attributable to concerns over the security of the strait as opposed to other market factors. The most solid data point remains that on yields: the 10-year T-Bond at 5.33% marks the highest level in over twenty years of records, a benchmark that markets will be watching in the coming sessions alongside the trend of the Italian spread and the price of crude oil.