The series of rate cuts of the last few days, with disproportionate interventions of 50 basis points in Switzerland e Canada and a 25 basis point easing by the European Central Bank, has helped to give a boost to the US dollar, which jumped by 1% on the euro, of 1,6% on the Swiss franc and 1,8% on the JPY. Wall Street closed modestly lower, but surprised with a 13,7% drop Adobe. Also Nvidia lost 1,41%, but Broadcom gains 14% in the after-hours, signaling a boom in orders from artificial intelligence. Especially noteworthy is the strong pressure on the US bond sector, resulting in a significant increase in yields. asian bags are mostly in sharp decline driven by the China still disappointed by the lack of impact on the new plan government aid. European stocks are seen opening weak after yesterday's expected ECB rate decision.
US Treasury yields rise
The dollar also drew energy from higher Treasury yields, as investors have scaled back expectations of aggressive U.S. monetary policy easing next year. Markets are still confident of a cut by the Federal Reserve next week, but have all but given up on a move in January, which is priced at a 20% chance. By the next Fed meeting, it will have taken office Donald Trump in the Oval Office may have already issued dozens of executive orders with broad business and political implications, analysts say.
Another factor worth noting for the US yields and the dollar is that the growth was better than expected in US producer prices released yesterday so much so that analysts revised down their expectations for the crucial core PCE index to around 0,13% from 0,2% onwards.
Long-term Treasuries this week they suffered heavy losses, with the yield of the reference bond at 10 years ian increase of 17 basis points, while yields at 30 years srose 22 basis points, the biggest weekly increase in over a year. The a 30-year treasury auction yesterday was not brilliant. After all, the rise in yields largely reflects an upward repricing of base rates, which are seen falling only slowly to 3,8% by the end of 2025, compared to 1,75% in Europe and 2,7% in Canada.
Wall Street down. Adobe's -13,7% surprises after the data. Nvidia also down
The same PPI data pushed it downwards Wall Street which ended with a 0,53% drop on the Dow Jones: the American index thus continues a negative series, which began on the 5th of this month, of six consecutive drops. Along the same lines, the S&P-500 is falling, closing below the levels of the day before at 6.051 points. The Nasdaq 100 (-0,68%) and the S&P 100 (-0,61%) are slightly down. A decidedly negative day for Adobe (-13,7% to $474,63), after the release of the financial results for the 4th quarter of 2023/2024 and the indications for the 2024/2025 financial year. Sales also on Nvidia (-1,41%). Broadcom +14% in afterhours, signals a boom in orders from artificial intelligence.
The overwhelming strength of the dollar crushes other currencies
The overwhelming force of the dollar is putting currencies in emerging markets under pressure: it is thought that the central bank of india sold dollars through state banks to support the rupee, which is close to historic lows. Even the yen has been a big loser, weakened by expectations that the Bank of Japan is unlikely to raise interest rates next week. Small-business wage woes are one more reason the BOJ may tread carefully with any tightening. The euro he slipped under $1,05 at 1,046, the lowest since mid-November.
China leads Asia's losses
In Asia, most stocks are falling in the wake of the Wall Street decline, with China leading the losses. The Hang Seng Index Hong Kong loses 1,7%, a movement that brings the weekly variation to +0,8%. CSI 300 of the stock markets Shanghai and Shenzhen -1,8%, -0,5% per week.
La China intends to increase the support for the economy in 2025, through measures to stimulate growth, including a higher budget deficit, increased debt issuance and a more flexible monetary policy. closing of the two-day event of the Central Economic Work Conference, the important conclave that brings together the communist leadership to take stock of the economy and outline the strategies for the new year, the commitment to "implement the most proactive macroeconomic policies" and to "expand domestic demand“, the state broadcaster reported. CCTV. Among the measures that the media are talking about, indicated in generic way and without details on the implementation, support for consumption and investments has the highest priority. In the report of the meeting held in Beijing, attended by the president Xi Jinping, other key objectives include “promoting the integration of'technological innovation and industrial, stabilizing real estate and equity markets, and preventing and containing risks in key areas and external shocks.” The leadership outlined plans to increase the ratio deficit tax next year from 3% of this year's gross domestic product, as well as to grow theissuance of ultra-long government bonds and special bonds of local authorities, added the CCTV. China “needs to maintain steady economic growth and keep employment and overall prices stable” in the coming year.
La Tokyo stock exchange is down 1%, +0,9% for the week. The yen continues to weaken, at 152,9. The'Tankan index Japan's manufacturing confidence index rose to 14 in the fourth quarter of 2024, the central bank said, above the 13 economists had expected. The indicator for major manufacturers fell slightly to 33 from 34, as expected. Smaller business confidence also improved, both in manufacturing and services.
The bag of South Korea is on the rise, the Kospi index gains 0,4% and returns to the levels prior to the introduction, then withdrawn, of martial law by the president. Meanwhile, a second vote is being prepared with the request for impeachment by the parliament.
European stocks seen opening slightly lower
Europe is set for a slightly lower opening ahead of some economic data, including eurozone industrial production. EuroStoxx50 futures are down 0,2%, while Nasdaq futures are up 0,3%, near an all-time high. Yesterday, Milan's FTSEMIB closed up 0,3%, Frankfurt's Dax +0,1%. Paris' Cac 40 is unchanged: the announcement of the new prime minister in Paris. Yesterday, the BTP closed at 3,34% yield, +15 basis points. Spread on the Bund widened to 114 basis points. The German 2,19-year is at XNUMX%.
Germany. Wholesale prices worsened, recording no increase on a monthly basis in November 2024, after +0,4% in the previous month. This was announced by the German Federal Statistical Office (Destatis). Analysts had expected an increase of 0,2%. Wholesale prices on an annual basis are still falling and slipped by 0,6% against the -0,8% recorded in October.
UK. Industrial production surprisingly falls in October. The industrial production index recorded, in October 2024, a decrease of 0,6% on a monthly basis compared to -0,5% in the previous month and the +0,3% expected by analysts. The trend figure records a decrease of 0,7% after the -1,8% of September and compared to the +0,2% of the consensus. Manufacturing production, on a monthly basis, records a decrease of 0,6% against the +0,2% estimated by analysts and compared to the -1% of September. The annual variation records a +0%, worse than the consensus (+0,9%), after the previous -0,7%.
several ECB officials will intervene later in the day. The central bank, which disappointed doves hoping for a 50bp move on Thursday. ECB Council members are also likely to move towards gradual 25bp cuts in interest rates at their January and March meetings, wrote yesterday evening Bloomberg citing sources familiar with the ECB discussions. A gradual approach would be most appropriate given current growth and inflation expectations. A steeper cut of half a percentage point would remain an emergency option but, under current conditions, risks conveying an unnecessary sense of urgency.
Banco BPM. An agreement with the unions on exits, hiring and bonuses is taking shape, according to the Courier. The negotiation was stuck at 1.100 new hires and 1.600 incentivised exits, but the bank has decided to spend everything on this year with the possibility of increasing the number of new hires and with a bonus aligned with that of other banks, the newspaper writes. The Antitrust has given the green light to Banco BPM Spa's takeover bid
on Anima Holding Spa, granting unconditional approval to the acquisition of control of the savings management company. After the approval of the Authority, there are still the steps to be taken with Bankitalia, IVASS and Consob, which will have five trading days to express its opinion. The launch of the takeover bid is scheduled for the end of February.
Prysmian has received a contract in New Zealand. The operator Transpower will be responsible for replacing the HVDC submarine power cables that connect the North and South Islands. The overall work should be worth 450 million NZ dollars, approximately 250 million euros.
stellantis. The Mirafiori plant in Turin will remain operational until at least 2032-2033 thanks to the production of the New Fiat 500, said the head of Europe of the automotive group, Jean-Philippe Imparato. The manager also said that Stellantis' decision to return to ACEA (European Automobile Manufacturers' Association) means adhering to its proposals, including opposition to EU rules on emissions for 2025.
Unieuro. The delisting following the takeover bid launched by the French Fnac Darty is expected for January 8, 2025.
Mediobanca, at the end of the SREP process, the ECB has set a minimum capital requirement for Cet2025 of 1% for 9,03. The Pillar 2 capital requirement remains set at 1,75%.
EniThe Board of Directors of the oil giant has approved the possible issuance of one or more hybrid subordinated bonds, to be placed with institutional investors, for a total amount not exceeding 1,5 billion euros or equivalent in another currency.
doValue. In the capital increase operation, subscriptions reached approximately 98,08% of the shares offered
TIM has received a communication from the Ministry of Economy and Finance (MEF) and Retelit, as potential buyers of TI Sparkle, in which they underline that they will be able to complete the activities necessary to submit an offer by next December 18, i.e. two days after the deadline set by mutual agreement.
