Volatility was very high, but the ending was positive: the umpteenth see-saw session of the European lists ended in green, the last of a quarter to forget due to the expansion of the Covid-19 pandemic. After numerous ups and downs, the continental markets found their way up thanks to a change of pace on Wall Street, an uncertain game and then gradually improving.
Piazza Affari gains 1,06% and returns above 17 thousand points, with the leap of Eni +7,3% and Atlantia 7,27%. The banks are mixed, still under pressure after the ECB's request to renounce the distribution of dividends, to conserve liquidity: Bper doing well +3.09, Unicredit down -1,75%. Intesa, on the other hand, rose by 1,2%, despite the decision to freeze a 3,4 billion euro coupon. The institute resolved to propose to the next ordinary shareholders' meeting the allocation of the profit for the 2019 financial year to reserves, but with the aim of returning to remunerating shareholders once the emergency has passed. The CEO Carlo Messina remains convinced of the voluntary and totalitarian public exchange offer on Ubi (+ 0,08%), which he considers even more valid for both institutions in this extraordinary phase.
The bond bond also closes a swing session: the spread between Italian and German ten-year bonds fell by 0,73% to 199 points and the yield of the BTP goes to 1,51%. Yields also up on the primary. The Treasury has assigned all the 7,75 billion euros of 5 and 10-year BTPs offered at auction, but the average yield on the five-year BTP (13th tranche) has risen to 0,8% from 0,36% in the February placement, that of the ten-year BTP in August 2030 (third tranche) to 1,48% from 1%, while the rate on the ten-year April 2030 (15th tranche) rose to 1,44% from 1,29%. Also assigned Ccteu for 750 million euros to 0,66%.
The Italian paper suffers from the gloomy forecasts on the economy: Confindustria estimates a drop in GDP by 6% in 2020 (-10% in the first half), while Goldman Sachs assumes a 10% GDP deficit ratio in Italy and Spain. In this situation, the economists of the US banking giant estimate that Italy's debt-to-GDP ratio could jump up to 160%, and 120% in the case of Spain and France.
Forecasts for US economic growth are dark: -30% GDP in the second quarter of 2020. However, encouraging news is coming from China on the manufacturing PMI. The survey of company purchasing managers jumps to 52 points after the lows (35,7) reached in January-February, in the midst of the Covid-19 emergency. However, we can speak of a recovery only when the PMI data rises for at least three consecutive months. The thirst for dollars is rekindled on the currency market, with the euro losing share against the greenback and the exchange rate falling to 1,01.
Meanwhile, the Federal Reserve announces the introduction of a new facility for central banks to facilitate their access to liquidity in dollars, allowing them to deliver government bonds in exchange for overnight funds in US currency. The new repo program, distinct from swap lines with major central banks where dollars are exchanged for other foreign currencies, “should help support the smooth functioning of the US Treasury market by providing a temporary alternative source of dollars in addition to sales of securities on the market”, explains the central bank. The program will start on April 6 and will last for at least six months.
On the European front, the divisions on coronabonds remain, rejected by the director of the Mes, Klaus Regling in an interview with the FT. According to Regling, it would take from one to three years to define a new European institution capable of issuing Eurobonds, therefore for financially cope with health care problems and to support businesses "the only way is to use the current institutions with the existing tools". The reference is precisely to the State-saving fund. Access to loans would include very different conditions from those required of Greece: "For the strengthened credit line I see limited conditions that ensure that the funds are spent in the right way and that the ESM will be repaid one day".
Among the raw materials, gold is declining and trades at 1623 dollars an ounce, while the oil rears its head in the hope that the Trump-Putin line will have some effect on the market and reopen the dialogue between Russia and Saudi Arabia. Crude rose by 1,34% to 20,37 dollars a barrel, while Brent appreciated by 0,5%, to 26,555 dollars a barrel.
Oil stocks of Piazza Affari regain share, in particular Eni, after yesterday's progress. Atlantia is doing well, with the market welcoming the hypothesis put forward by the Sun and the possible sale of a stake between 40-50% of Aspi to F2i and Cassa Depositi e Prestiti, with the latter which could enforce the debt of 1,2 billion which it owes to the motorway company, perhaps through a possible conversion.
Buzzi is up, +4,35%, after the recent losses. Fiat shines, +4,15%, with the top management and the board of directors who have unanimously decided to waive their compensation until the end of 2020. Exor +0,58% deflates during the session, animated by the announcement of an agreement to acquire 8,87% of the US ride-sharing company Via Transportation with a total investment of 200 million dollars. Down Prysmian -4,67%; Ferragamo -3,59%; Post -2,48%; Pirelli -2,27%.
