Oil above $100, European stock markets fall: inflation fears return
Brent crude rises above $104 after fresh Iranian attacks on oil tankers in the Strait of Hormuz, TTF gas exceeds 80 euros per megawatt-hour, and Fed minutes point to a likely further rate hike by year-end.
European stock markets opened lower on Thursday, October 8, weighed down by the joint rise in oil prices and government bond yields. According to market data reported by Affaritaliani, Brent crude rose to over $104 a barrel after fresh Iranian attacks on oil tankers in the Strait of Hormuz. On Piazza Affari the Ftse Mib index opened down 1.31%, dragged by banks, while Eni shares gained 1.49%, benefiting precisely from the rise in crude oil. The spread between BTp and the German Bund rose to 119 points.
A live update from la Repubblica, based on the same market data, indicated an opening decline of 1.41% for the Ftse Mib, at 49,269 points, with similar drops also recorded by the Dax, Cac 40, Ftse 100, Ibex 35 and Aex: a common front of decline affecting all the main European markets on the same morning.
On the gas front, Middle Eastern tensions were also felt on the European wholesale market: at 7:48 a.m. natural gas at Amsterdam’s TTF was quoted at 80.15 euros per megawatt-hour, up 2.65%, according to the reading reported by Blasting News.
Completing the picture are the minutes of the Federal Reserve’s September meeting, published on Wednesday and reported by Euronews Italia: most committee members consider a further rate hike likely by the end of the year. In September the American central bank had already raised rates for the first time since July 2023, by a quarter of a percentage point, bringing them into a range between 3.75% and 4%. On this point the news comes from a single journalistic source, which however draws on an official document of the US central bank.
The rise in oil prices, according to Euronews Italia, has reignited inflation fears and increased upward pressure on government bond yields, already at elevated levels for several years. This is the combination that markets are pricing in today: a conflict in the Strait of Hormuz driving energy prices higher, and an American central bank that views that rise as an additional argument for further monetary tightening.
The figure that sums up the day remains the BTp-Bund spread at 119 points, rising together with the price of oil in the same morning of trading.
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