The long-awaited day has arrived. At 14.15pm today, Thursday 6 June, the European Central Bank will announce the first rate cut after three years of monetary tightening, with the deposit rate expected to fall from the current 4% to 3,75%. The haircut has long been taken for granted and investors' attention will focus above all on the president's words Christine Lagarde who in the press conference could give some indication on the next moves, about which however the uncertainty is very high. The ECB has already said that the approach will depend on the data, but the clash between hawks and doves seems destined to reignite. Money markets price for this year cuts of around 65 basis points, with two quarter-point reductions taken for granted and the chances of a third move seen at around 50%. Moody's Ratings instead, it expects the ECB to cut key rates by around 100 basis points in 2024, taking into account the modest prospects for economic growth. “The likely rate cut by the ECB will support euro area banks' loan growth after months of weak lending activity. Lower rates will also provide relief to vulnerable borrowers, reducing banks' capital risk,” says Fabio Ianno, VP-Senior Credit Officer at Moody's Ratings.
Not to be underestimated either data arriving from the United States which could endorse or, on the contrary, ward off a possible rate cut in September. While waiting for next week's Fed meeting, tomorrow it will be the turn of non-agricultural payrolls, but today the focus will be on new weekly unemployment claims, which are expected to be substantially stable at 220.000.
Italy: GDP +1% in 2024, inflation towards ECB targets
According to Istat Italy's GDP it will grow by 1% in 2024 and 1,1% in 2025, supported by domestic demand net of inventories and net foreign demand (+0,7% for both). In 2025, economic growth would instead be driven mainly by domestic demand (+0,9%).
For the gross fixed investment a deceleration dynamic is expected in the two-year period (+1,5% and +1,2% in 2024 and 2025 respectively, from +4,7% in 2023), determined by the disappearance of tax incentives for construction, which will be offset both from the effects of the implementation of the measures envisaged by the Pnrr and from the reduction in interest rates. L'occupation will instead grow by +0,9% in 2024 and +1,0% in 2025) against a unemployment declining to 7,1% this year and 7,0% in 2025.
There is also good news on prices, with Istat expecting a gradual return towards rates of inflation close to the ECB targets. This dynamic will determine a strong deceleration in the spending deflator of resident families for 2024 (+1,6% from +5,2% in 2023) which will be followed by a moderate increase in 2025 (+2,0%). The forecast scenario remains characterized by the persistence of high uncertainty in the international framework, determined by the evolution of geopolitical tensions, the national statistics institute says.
Staying with the data, the data on the data disappoints expectations orders to industry in Germany, fell 0,2% in April, reflecting the persistent difficulties of Europe's locomotive industrial sector.
European stocks rise with eyes on Lagarde
In this context, European stock markets are rising, driven by tech stocks (+1,8% for the sector) which reached almost 24-year highs, while investors prepare for the European Central Bank's rate decision.
Lo Stoxx 600 advances by 0,67% to a three-week high, with the Ftse Eb which gains 0,45% to 34.664 points. Almost carbon copy performance (+0,46%) a Madrid, while they do even better Frankfurt (+ 0,56%) and Amsterdam (+ 0,52%). Paris rises by 0,38%, outside the EU London is up 0,32%.
On the stock market, the performance of the German corporate software giant is noteworthy Temple Size, gaining 5,77% after analysts noted CEO Christian Klein's comments at the Sapphire conference, where he provided encouraging guidance for 2026 and 2027. The Dutch semiconductor also Asml extends yesterday's increases with +2,2%.
In the health sector it stands out Novo Nordisk (+3,25%) which reached a new record.
In Piazza Affari, eyes on Iveco-Leonardo
In Piazza Affari the eyes of investors are focused on Leonardo (-0,34% after reaching a rise of 1,5%) and above all up Iveco (+5,34%). The automotive company failed to make a start-up price after an indiscretion from Courier according to which Leonardo would have contacted some international investment banks, including UBS, to study the purchase of Iveco Defense Vehicles (IDV). Some estimates set the value of Idv at around 750 million, but analysts see a higher valuation in light of the multiples of other companies in the sector, adds the newspaper. According to Equita, for Iveco "in the event of a sale, the obstacle to any M&A would be removed as the exit from the defense business would reduce the risk of the government exercising golden power". For Leonardo "we believe it is inevitable to pay a majority premium", adds the broker.
On the shields (+2,71%) FinecoBank after the net collection data in May of 945,6 million euros, while the good mood of Hi-tech spreads stm (+1,45%). Banks also rose on ECB day: Unicredit (+ 0,7%), Intesa Sanpaolo (+ 0,3%), Ps (+ 0,7%)
Instead, they are placed at the bottom of the FTSE Poste Italiane (-1.47%), nexi (-1,27%), Mediobanca (-1,08%).
Outside the Ftse Mib, Fincantieri rises by 2% in the wake of some statements by CEO Folgiero to the press.
Oil tries to rebound
Attempt the rebound Petroleum thanks to growing expectations of a rate cut by the Federal Reserve in September, but gains are limited by an OPEC+ plan to increase supply and rising US inventories. At mid-day, Brent rose by 0,36% to 78,69 dollars a barrel, the WTI advanced by 0,47% to 74,4 dollars. The TTF gas remains weak after the drop on the day before which took it to the lowest of the last 10 sessions.
on the currency theEuro it moves stable at $1,088.
Spreads slightly declining on ECB day
Moving on to government bonds, I spread between BTP and Bund fell slightly to 129 basis points on the day of the rate cut by the ECB. On the contrary, the trend is slightly rising yield of the ten-year BTP benchmark, which stands above 3,80%, as well as that of the Bund, which exceeds 2,5%.
