The attention of the markets shifts towards the East. First stop, Kirkuk, a large oil center in the heart of Kurdistan. The Iraqi army has launched a violent attack against the KKR peshmerga who control the wells already defended against ISIS. It is the response to the referendum on independence voted by an overwhelming majority of the Kurds. The conflict between the two US allies has already inflamed oil prices: the brent deals at $58, the WTI around 52, both up by around 1,5%.
CHINA, GDP TOWARDS 7%, CONSUMER PRICES COLD
On the eve of the Communist Party Congress which kicks off on Wednesday, the Dragon's economy accelerates. Zhou Xiaochuan, the governor of the central bank said in Washington that GDP will close the year with growth of around 7%, accelerating both with respect to the last quarter and the plan targets. There is also good news from inflation: producer prices are up +6.9%, thanks to the rally in steel. But consumer prices mark time, only +1,6%.
In addition to confirming Xi Jingping's leadership, the Chinese Congress will dictate the strategic lines of politics and business of the second largest economy on the planet for the next five years. Elections for the central committee will be held immediately after the Congress, from which the seven key men will emerge (including undoubtedly the president) who will have to lead the reforms and the fight against pollution, now the number one emergency. The data on inflation complete a substantially positive picture: the Shanghai Stock Exchange is up moderately +3%, as is Hong Kong.
TOKYO STILL IN THE RALLY RETURNS TO THE LEVELS OF 21 YEARS AGO
Six days before the elections, the Tokyo Stock Exchange continues to rise +0.9%, up from six sessions (+3,6%) to its highest level since November 1996. Voters will have to choose whether to confirm Prime Minister Shinzo Abe or whether to choose the mayor of Tokyo Yukio Koike, under whom the opposition front has coagulated.
The other stock markets in the Asia Pacific area were on positive ground, returning to 2007 levels. The South Korean Stock Exchange is up 0,1%, from +3,3% last week. India's BSE stock market index rises by 0,7%: +2,6% last week.
AUSTRIA VOTES TO THE RIGHT. SINGLE CURRENCY BELOW 1,18
Austria, Catalonia, Brexit. The problems of the Eurozone are reflected in the euro, this morning just above 1,18 against the dollar.
The icy wind of nationalist populism is blowing from the East. Sebastian Kurz, 31, rising star of the right, with 31.7% of the votes, will be the new Austrian chancellor at the head of a government marked by the massive presence of the Freedom Party, xenophobic and with undisguised sympathy for Hitler's past.
The Catalan match is still holding the table. At 10 this morning the Madrid ultimatum expires to the President of the Generalitat Carlés Puidgemont on the declaration of independence.
On Wednesday the European council will have to say whether negotiations with the UK on Brexit have made enough progress to make an agreement possible within two years. In the (probable) case of a negative response, the risk of an exit without agreements will become tangible.
The negotiations for the formation of the new German government. In the Land of Lower Saxony, the Socialists of the outgoing governor won with 37,2%, +4,6% compared to the previous elections. Angela's CDU Merkel it lost 2% to 34%. The Greens and the Liberals are in sharp decline, a defeat that makes the formation of a coalition between these three parties in the national parliament more problematic. The anti-immigrant and anti-Europe party, AFD reached 6%.
ECB, COMMISSION ON QE COMING SOON
Meanwhile Mario Draghi, a few days before the ECB meeting on rates next week, is trying not to end up in the trap of controversy between the Supervisory Authorities, led by the French Danielle Nouy, the European Parliament and the States (Italy above all) regarding the disposal of sufferings. Consultation is still ongoing, he said, pending decisions on the issue that are expected in December.
In the meantime, the ECB will have to announce the strategy for a soft retreat from Qe, invoked by the Bundesbank and in any case anticipated by the increase in the gap between the rates of Italy and Spain with respect to the Bunds. The latest rumors arriving from international agencies speak of a confirmation of Qe (vividly defended by Draghi in Washington) for a period of 9-12 months but at a more modest rate of purchases (from 25 to 40 billion per month).
The parade of corporate accounts has also begun in Europe: this week it's up to Nestlé, Unilever e Renkit Beckiser.
60 US QUARTERLY COMING SOON: WAITING FOR NETFLIX
In fact, today the US quarterly campaign gets underway: the quarterly data of 6 companies in the S&P 500 index will arrive during the week. Much anticipation today for the accounts of Netflix , headlined Friday after surpassing 200 million subscribers. In the limelight also the quarterly of Goldman Sachs e Morgan Stanley but also, among others, the accounts of Verizon e General Electric.
Waiting for Donald Trump's decisions on the future of the Fed. Janet Yellen (his reconfirmation unlikely) he said that the strengthening of the economy guarantees "gradual increases in interest rates", that he expects "inflation to rise again" and that the current weakness "does not continue". This week it will be the turn of some of the most influential members of the Fed: William Dudley of New York, Deputy Stanley Fischer, Robert Kaplan of Dallas and Neel Kashkari of MInneaplis, the leader of the doves. Future choices on rates are under discussion in the face of inflation which, for now, has not abated.
On the macro front, the Empire Building Manufacturing index should be followed, relating to the economic situation in the North East. But the most important appointment is with the Beige Book, the most faithful indicator of the American economic situation.
CALENDA: TODAY THE MEASURES ON TELECOM
This morning the Council of Ministers, already convened for the approval of the 2018 budget law, will also examine the issue of 'golden ' in the context of the Telecom-Vivendi affair. This was announced yesterday by the Minister of Economic Development Carlo Calenda. “Italy – he said – benefits from foreign investments, they bring value – he clarified calenda – but on the other hand when you come you respect the rules of the country. If there is a check, it is declared, if there is a need to notify the Government, it is done or sanctioned. The theme is the strategic nature of the network, not just telephony but the entire industry 4.0”. “There is also a security issue,” Calenda added in reference to Sparkle e raising the issue of network separation.
The Economic Bulletin of the Bank of Italy will be released on Friday. On the same day, the update of the Italy rating by Fitch will be released.
UNDER THE SPOTLIGHTS BANCO BPM AND CATTOLICA
In Piazza Affari, in addition to the Telecom affair, attention will be focused on the choice of bancassurance partner by Banco bpmscheduled for tomorrow. In the running are the English Covea and Cattolica Assicurazioni. In the case of the success of the Verona company, the market takes for granted a capital increase of the institution of which Warren Buffett became the first shareholder a few days ago. In this case, the transformation of the cooperative into a joint stock company and the cancellation of the per capita vote is highly probable.
“40 IPOS IN THE MARKET PLACE IN 2017”
Piazza Affari closed last week with a modest change: Ftse Mib index +0,1%-
However, 2017 is starting to be the best of the last ten years for Borsa Italiana, and not just in terms of performance. Word of the number one of Borsa spa, Raffaele Jerusalmi. 'There have already been 30 hypotheses and we're heading towards 40 by the end of the year: about ten listings should take place on the Aim, probably two on the MTA, even if in the case of the main market it is always difficult to make predictions'. Up to now, Jerusalmi indicated, the companies of Piazza Affari have managed to raise around 17,7 billion euros through the market.
