- European shares down ~0.1%
- STOXX 600 up over 22% in 2021
- London closed early, Frankfurt shut
- U.S. stock index futures dip
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STOXX UP 22% IN 2021: BANKS LEAD, TRAVEL LAGS (1317 GMT)
The last trading session of the year delivered no surprises with many European bourses already shut since yesterday and the rest closing shop earlier. Volumes and newsflow was thin.
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The STOXX 600 (.STOXX) ended the day just down slightly and at striking distance from a record high hit last month, scoring a 22% annual gain, its second best year since 2009.
In sectors, travel & leisure (.SXTP) was the worst performer but still managed to end the year up around 4%, held down by pandemic restrictions.
Banks (.SX7P) jumped to the top spot, up 34%, boosted by the economic recovery and a hawkish turn for monetary policy across the globe.
Here’s your last 2021 snapshot.
GERMAN-ITALIAN SPREAD? KEEP IN MIND 150 BPS (1050 GMT)
The spread between Italian and German government bond yields is among the hot topics in financial markets as former ECB chief Mario Draghi might leave his job as Italian prime minister if he became Italian president in January next year.
In the short term, the scenario which would trigger the maximum potential widening of the spread is snap elections; but analysts are inclined to rule that out at the moment.
“We think the spread between German and Italian 10-year bond yields is unlikely to widen beyond 150 basis points,” Fabio Castaldi, senior investment manager at Pictet, says.
“I believe that investors, especially domestic ones, will look to step in and buy Italian bonds if spreads widen to those levels heading into the election of the next Italian President in January,” he adds.
“Italian politics will be a substantial issue for Europe unless it’s clear who will succeed Draghi,” Holger Schmieding, chief economist at Berenberg,