Not only the Fed, but also the Boe and the Boj. An intense week that opens today from the point of view of monetary policy: after the move on the ECB rates last Thursday (-25 bp), this week the attention will mainly be on the Federal Reserve of the United States that will announce its decision on Wednesday, followed by the Bank of England on Thursday 19 and by the Bank of Japan on Friday 20. But it will also be a week full of data, while the banking risk reignites in Italy.
With regard to the Federal Reserve The market is still divided and assigns a 70% probability to a 25bp cut (soft landing style) and a 30% probability to a more aggressive 50bp cut. The latter, could also be taken badly by the markets because it is interpreted as a sign of concern about the state of the economy of the world's largest economy. However, there are other factors to consider: with inflation slowing, a bigger cut would be necessary to keep real interest rates from rising. Furthermore, the next Fed meeting will not be held until early November, which is one of the reasons why markets have 114bp of easing priced in by Christmas and another 142bp for 2025. Incidentally, the first Fed meeting of 2025 will be held just two days after the presidential election, a move that is therefore politically charged.
Still watch out for the dollar/yen exchange rate which seems to want to anticipate a more restrictive policy by the Bank of Japan. Since July 11, the yen has strengthened by 15% against the greenback, returning to the values of the beginning of the year. This rapid movement has pushed many operators to forcefully close their operations carry trade opened in the last two years by those who, having borrowed in yen at low rates, have then used that liquidity to invest mainly in dollars in US government bonds or in stocks in the technology sector.
The week also has a busy schedule US data calendar, including retail sales and industrial production in the United States, as the FBI follows up on news that the Republican presidential candidate, Donald Trump, was the target of a second assassination attempt yesterday. Friday, September 20 also sees the expiration of a mountain of derivative contracts: futures and options on indices and stocks
In the past week, despite the strengthening of the yen, the tech stocks led by Nvidia and more generally by the "magnificent 7" have regained their lustre, cancelling out the decline of the previous week. The S&P 500 index also moved very well (+4,5%), exceeding 5.600 points and repositioning itself close to the all-time highs. European stock markets rose a little less, also because they were decidedly less equipped with technology stocks.
Asia holidays begin: stocks cautious
The session was calm and with low volumes in Asia, due to the closed for holidays markets in China, Japan and South Korea. The Hong Kong stock exchange opened down -0,6%, but then came close to parity. On Saturday, September 14, some Chinese macro data was published, which turned out to be weak. In August, the Chinese industrial production, year-on-year, it recorded +4,5%, the lowest in five months, down from the previous figure of +5,1%. Expectations were for +4,7%. retail sales, year-on-year, increased by +2,1%, down from +2,7% in the previous period, below expectations of +2,5%. These data could push the authorities to launch a series of measures to stimulate the economy. According to Vivek Dhar, an analyst at CBA, to reach a growth target of 5% in 2024, China would need to launch further economic stimulus by the end of the year.
Il price of gold reached a new record at $2.616 an ounce amid growing bets that the Fed will cut interest rates.
European stock markets seen positively: eyes on Banca Generali, Snam, Unicredit, Eni
European stock markets expected to rise slightly (Eurostoxx50 futures +0,10%).
General Bank, controlled by Assicurazioni Generali, has decided to launch a voluntary public purchase offer (OPA) for all the shares of Intermonte Partners SIM, independent investment bank listed on Euronext Growth Milan, with the aim of delisting the target's shares from Piazza Affari. The offeror will pay a consideration equal to 3,04 euros for each share (cum dividend, i.e. inclusive of coupons relating to any ordinary or extraordinary dividends distributed by the issuer) tendered in the offer. The consideration incorporates: a premium equal to 21,9% compared to the official price of Intermonte shares on 13 September 2024 (the last trading day before the date of the communication) and a premium equal to 22,4%, 24,0%, 17,3% and 18,9% compared to the weighted arithmetic mean of the official prices recorded by Intermonte shares, respectively in each of the previous 1, 3, 6 and 12 months before the reference date.
Saipem, a services and solutions company for the energy and infrastructure sector, has been awarded an offshore EPC contract by QatarEnergy LNG for the combined COMP3A & COMP3B packages of the North Field Production Sustainability Offshore Compression Program project, aimed at supporting production from the North Field offshore natural gas field, located off the north-eastern coast of Qatar. The contract value is approximately $4 billion.
Eni, in negotiations with several funds to sell a further stake in Fullness, the subsidiary active in the production of renewable energy and the sale of gas and electricity to households and businesses, according to sources familiar with the matter. Apollo Capital Management, Norwegian private equity fund HitecVision and London-based Trilantic Europe are among the investors interested in the potential acquisition of about 10% of Plenitude.
Unicredit. The CEO Andrea Orcell said in an interview with the German newspaper Handelsblatt that a merger between Italy's UniCredit and Germany's Commerzbank would create value for all stakeholders and create a much stronger competitor in the German banking market. "For the time being, we are only a shareholder," he said. "But a merger of the two banks could lead to significant added value for all stakeholders and would create a much stronger competitor in the German banking market." UniCredit also announced theStart of buy-back program as an advance on expected distributions for the 2024 financial year for an amount equal to 1.700.000.000 euros.
UnieuroThe government is concerned about some aspects of the offer by the French Fnac Darty on Unieuro and could ask for reassurances under the Golden Power.
Campari closed last Friday's session down 5,64%, penalized by the statements of CEO Matteo Fantacchiotti, cautious on the trend in the spirits sector for the third quarter and the end of the year.
Today's macro data
At 10 am with the second reading of Italian inflation month-on-month for August, which should not bring any surprises compared to the +0,2% (from +0,4% in July) of the first reading and which should also confirm the annual trend at 1,1% (from 1,3% in July). At the same time, the data on the cost of labor in the second quarter of the Eurozone is expected (previous: +5,1%). Instead, at 11 am the trade balance for Italy in July will be published and at 14:30 pm the Empire Manufacturing index for September for the United States (previous: -4,7 points; consensus: -4 points).
