The unexpected rebound in US employment in May (2,5 million more employed, with the jobless down to 13,3%) has strengthened the hopes of the financial markets in a rapid, V-shaped recovery of the economies.
Chinese lists are up, from Shanghai (+0,9%) to Hong Kong (+0,5%). Tokyo is also on positive ground (+0,5%): Japan's GDP fell by 2,2% in the first quarter, against an initial estimate of -3,4%, another figure that reduces the extent of the damage from coronavirus.
The data on Chinese exports contributed to comforting the optimists, limiting the decline to 3,3% in May, but imports, down 15% compared to a year ago, confirm that consumers remain cautious, much more than investors: 49 stock exchanges, the MSCI global index attests, have recovered to the levels of mid-February, before the outbreak of the epidemic. A precious signal will arrive on Wednesday from the inflation data in China, a reliable thermometer of the recovery of the Dragon economy: the price level should have dropped to 2,6% against 3,3% in April.
On Wednesday, the OECD will publish economic forecasts for the 37 member countries and the other major economies of the world.
OIL RECOVERS, EQUITY FUTURES WEAK
Brent opens the day with a 1,5% gain, at 42 dollars a barrel, a new three-month high. OPEC, Russia and other allies agreed on Saturday to extend record oil production cuts through the end of July, extending a deal that has more than doubled crude prices in the past two months, pulling nearly 10% of global supplies.
Stock futures moved little after Friday's jump. Rates on 0,895-year treasuries stable this morning, stuck at XNUMX%. Racial tensions do not weigh on Wall Street, at least in appearance. Today the funeral home of George Floyd, the citizen killed by the police in Minneapolis, will be opened in Houston. US President Donald Trump withdrew the National Guard from Washington after demonstrations on Saturday. “But they can come back quickly if necessary,” he stressed.
Futures on European stock exchanges anticipate a start just below parity. The Eurostoxx 50 index completed the week with an 11% gain.
GERMAN CONFIDENCE GOES TO -20 (FROM -51)
Still in the red, but the improvement can be seen. This morning the Ifo index, released early in the morning, signals a significant recovery in German business confidence, which went from -51 to -20,4 compared to a year ago.
After the choice of the ECB to increase purchases of securities on the markets by another 600 billion and the German plan to relaunch the economy (130 billion euros) thus opens another intense week for the future of the Eurozone. Today Germany will communicate data on industrial production in April, while Istat will release the prospects for the Italian economy in 2020. Data on GDP and employment for the Eurozone in the first quarter will be published on Tuesday.
APPOINTMENT WITH FED AND EUROGROUP
The Eurozone's spotlight will then focus on Thursday's Eurogroup and Friday's Ecofin meetings, decisive for the fate of the Recovery Fund and other aid to Southern Europe. Tomorrow the finance ministers of the European Union will discuss the next steps on the Recovery Fund and the multiannual budget in view of the European Council on 19 June. The German Foreign Minister, Heiko Maas, speaking to the Zdf, said that the Recovery Fund will need "a few weeks to negotiate".
Today the president of the ECB, Christine Lagarde, will report to the Economic and Monetary Affairs Commission of the European Parliament on the latest decisions in support of the European economy to deal with the coronavirus crisis.
APPEAL OF ITALIAN AND GERMAN ECONOMISTS
The former INPS president, Tito Boeri, the German MEP of the Greens, Sven Giegold, and the economist Guido Tabellini have launched an appeal – already signed by about sixty Italian and German economists, intellectuals and politicians – with 5 shares key to relaunching the EU starting from the fight against money laundering and the elimination of fiscal dumping.
Two appointments are destined to condition the Italian week. The situation of the former Ilva is getting worse. The unions have called a strike for tomorrow against the "unacceptable" industrial plan presented by Arcelor Mittal, which provides for 3.300 redundancies out of 10.700 employed.
THE ACCOUNTS OF ATLANTIA IN THE SPOTLIGHT
Even hotter, at least for the international financial repercussions, is the situation of Atlantia, which will present its quarterly report on Wednesday. And the times for an agreement in extremis are now really short: the hypothesis of the early withdrawal of the concession is becoming more and more tangible with unpredictable, but still devastating legal implications, including the effect on large institutional investors.
The calendar of Piazza Affari foresees today the detachment of the dividend of Ascopiave, Equita Sim and Mutuionline.
ECB GOES GREEN TO INTESA/UBI
Intesa received from the European Central Bank prior authorization for the acquisition of a controlling stake in Ubi Banca which agreed with Cattolica Assicurazioni to postpone to 30 June 2021 the expiry of the existing distribution agreements for Life bancassurance.
GILEAD AND ASTRAZENECA: THIS IS THE MERGER
In the meantime, the Treasury's collection activity continues unabated: on Wednesday the auction of the annual Bots for the amount of seven billion will be held. The possible merger, anticipated by Bloomberg, of two giants in the pharma sector is in the spotlight on the markets: Gilead, the closest laboratory to an anti-Covid-19 invention, and AstraZeneca.
