By now we can speak of a "Xi Jingping put", given the Chinese attention to counter the financial effects of the clash on tariffs triggered by Donald Trump, grappling with the New York Times accusation of "being an agent of Moscow" who complicates the American picture, already stressed by the tug of war between the White House and Congress over the Wall.
In this context, Beijing has taken the field with great vigor to limit the effect of the negative trend on the price lists triggered by the worsening of trade. Alarmed by the simultaneous decline in exports and imports, the Chinese authorities intervened, with the promise of aid, stimuli and pro-cyclical measures. Soon, there will be a press conference by the deputy governor of the People's Bank, Zhu Hexin, which will also be attended by the deputy finance minister and the deputy chairman of the Reform Commission, Lian Weiliang. The press release disclosed in advance speaks of various measures, including the lowering of taxes for small and medium-sized manufacturing companies. Beijing TV quoted a statement by Premier Li Kequiang: "We are in a position - he said - to ensure recovery already in the next quarter".
THE RISE OF THE YUAN CONTINUES, OIL OIL IS HOLDING DOWN
The reaction of the price lists was immediate. The Hong Kong Stock Exchange is up 1,7% and the CSI 300 index of the Shanghai and Shenzhen stock exchanges is up 1,4%. The financial markets of Tokyo (+0,7%, closed yesterday), Seoul (+1,4%) and Mumbai (+0,7%) also rose.
The yen falls against the dollar, confirming the recovery in risk appetite.
Meanwhile, the appreciation of the yuan continues, at 6,75 against the US currency. The dollar/yuan exchange rate is now the reference indicator of the progress of the negotiations on tariffs underway between China and the United States, but its influence is also growing on other markets, including oil. Brent yesterday lost 2,5% to 58,9 dollars a barrel, this morning it gained 1% to 59,7 dollars a barrel. Yesterday Saipem dropped 1,70%, Eni -0,35%.
WALL STREET IN THE RED, BUT LIKE THE CITIGROUP ACCOUNTS
China's difficulties yesterday also weighed on the US markets, starting with the drop in semiconductor prices, the most sensitive to the performance of Asian economies. But, surprisingly, Wall Street welcomed the quarterly report from Citigroup (+4%) which also signals a worsening of the accounts. It is the signal that the market has already discounted the effects of the economic slowdown in advance.
However, the main indices closed in the red: Dow Jones -0,36%, S&P 500 -0,53% and Nasdaq -0,94%. The accounts of JP Morgan and Wells Fargo are on the calendar today.
LONDON VOTES ON BREXIT TODAY. DRAGONS TO THE EU PARLIAMENT
In Europe spotlight on Brexit, awaiting the outcome of British Parliament vote. The data on German GDP for 2018 and the presentation to the European Parliament by Mario Draghi of the ECB budget should also be followed. Yesterday, China's slowdown also made itself felt on European lists. Complicating the session was the figure, worse than the already cautious forecasts, of industrial production in the Eurozone, down by 1,7% on a monthly basis and by 3,3% on an annual basis. In this context, the retreat of the price lists is not surprising, however contained by the rebound at the end of the session.
PIAZZA AFFARI DEFENDS 19 THOUSAND QUOTA
Piazza Affari thus opened the week in the red, without however ever falling below the barrier of 19 points: -0,61% to 19.171 points. More contained losses for Frankfurt (-0,3%) and Paris (-0,39%). However, the French list is the rear in Europe. Since the beginning of 2019, under the pressure of yellow vest protest, the index gains only 1%, against 3% in Frankfurt and 5% in Milan.
Madrid (-0,7%) and, outside the eurozone, Zurich (-0,8%) were weak. London, on the eve of D-day on Brexit, dropped 0,91%. Meanwhile, the prospect of a postponement of the date of Great Britain's exit from the EU, set for March 29, is gaining ground. But uncertainty reigns supreme.
THE MARKET APPLAUDS THE NEW BTP 15
After a morning in negative territory, in the afternoon the Italian secondary reversed course after the confirmation of the forthcoming placement of a new 15-year BTP.
The spread between the Italian and German 261.80-year bonds narrowed by an abundant point, to 10 points. The yield on the 2,85-year BTP closed at XNUMX%.
The Ministry of Economy has appointed Barclays, Citi, HSBC, JP Morgan and UniCredit to lead the placement of the new bond through a syndicate. The launch of the issue maturing on 2035st March XNUMX will take place “in the near future, in relation to market conditions”.
The spread between the Italian and German 261.80-year bonds narrowed by an abundant point, to 10 points. The yield on the 2,85-year BTP closed at XNUMX%.
In recent weeks, short-dated Italian government bonds have fared better than long-dated ones, probably because investors are positioning themselves in view of the launch of a new LTRO (long-term refinancing) by the ECB.
The 12-month BOTs, in particular, are raked up by the banks, because they can be delivered cheaply, indeed, with a little yield, to the central bank as collateral. The German counterparts (BuBill) are relatively safer, but are also much more expensive, given that they have a negative yield of 0,6%, compared to +0,3% of the annual BOT. Investors who are betting on the central bank's new injections of liquidity feel quite relaxed in betting on Italy, at least on short-term maturities.
THE ECB'S AX ON MPS NPLs (-10%)
Difficult day for the banks affected by the landslide of Monte Paschi (-10,19%), in free fall after the disclosure of the draft decision on the SREP taken by the ECB: the minimum target has been set at 11%, which translates into the need for further massive provisions against NPLs. Banca Akros downgraded the bank's rating from Buy to Neutral.
The sector index thus lost 1,90%. Sales were particularly heavy on Bper (-3,85%), Banco Bpm (-2,39%) and Ubi (-2,34%).
A new stormy season is looming for credit in the Bel Paese, still struggling with the Carige case: the supervision of the ECB has asked all the banks under its jurisdiction to proceed quickly with the disposal of non-performing loans, so to reach zero around 2026. The measure particularly concerns Italian banks, in whose balance sheets there are still tens of billions of problematic loans.
MANLEY: FCA IS REVIEWING ITALIAN PLANS
A contested session also for the industrial sector. Leonardo, in particular, falls by 2,36%. Prismian -0,63%.
The automotive sector loses momentum: Brembo is down (-1,11%), affected by the drop in sales in China. Pirelli (-0,23%) does not benefit from the sales results of Continental (+1%) in Frankfurt: the German group expects fiscal 2018 sales of around 44,4 billion euros and the adjusted Ebit margin around 9,2, XNUMX%.
In the evening, speaking at the Detroit show, Fiat Chrysler CEO Mike Manley said that the group is reviewing the investment plan for Italy from 5 billion euros in light of the new legislation on incentives for the purchase of low-emission cars, therefore electric and hybrid. The CEO confirmed that the Comau and Teksid subsidiaries are not for sale.
CHINESE SHADOWS WEIGH ON LUXURY. PRADA AT THE MINIMUM FOR 2 YEARS
Fears about Chinese growth affected the luxury sector: Moncler lost 2,66%, better than Ferragamo (-0,5%). Tod's (+1,84%) goes against the trend.
Worse Prada (-5% on the Hong Kong Stock Exchange), slipped to its lowest since September 2016. The slowdown continued this morning: the stock lost a further 0,9%.
In positive ground instead Tim (+0,2%) on the day in which the board of directors convened a meeting by majority vote of members for next 29 March. The French group reacted to the date set at the end of March, criticizing the "delaying tactics" of the directors appointed by Elliott and said it was ready to ask for a new meeting of shareholders this summer "if governance and results do not improve".
ONLY THE JUVENTUS STAR SHINES
The best notes were reserved for Juventus (+2,45%). Plus signs also for Amplifon (+0,89%) and Unipolsai (+1,03%).
Stefanel leapt off the main list (+22,76%) which has more than doubled its value since the beginning of the year. The stock benefits from the news that the Treviso court has set April 15 as the deadline for the presentation of the final proposal for an arrangement with creditors or for the approval of a debt restructuring agreement.
