The economy is buoyant, the stock exchanges are trying to predict the timing and extent of the tax reform promised by Donald Trump. Confirming the atmosphere in Washington came the surprise resignation from the Fed of Daniel K. Tarullo, the man who translated the principles of Dodd-Franck, the law approved after the cracks of 2008/09, into rules. Under his direction, US banks have increased capital ratios from 7 to 12 percent, with capital increases of 700 billion dollars. Now, to the delight of Goldman Sachs, the reins are loosening.
The economy is also buoyant in Europe, but political uncertainties are fueling the markets' unease. And so, in the operating rooms, strategies are developed to take advantage of the possible turbulence. The right moment to take advantage of the weakness of the OATs (the transalpine BTPs), the traders suggest, will be between the first and second round of the elections, from the end of April to 8 May.
On the other hand, there are those who suggest selling German Bunds, taking advantage of Angela Merkel's drop in consensus, and buying Polish bonds in exchange, taking advantage of the improvement in the economy. Not to be overlooked, of course, is the eternal Greek game, which is increasingly dangerous. And then there's Italy, stunned by the new knockout blows coming from the bank balance sheets.
THE TOKYO STOCK RISE. SWITZERLAND: NO TO TAX REFORM
The North Korean missile launched into the Pacific yesterday as Donald Trump and Shinzo Abe wrapped up their round of golf didn't disturb the markets much. Indeed, the Asian stock exchanges have noted with relief that the US president has not made precise requests on the yen or other measures to weaken Tokyo's exports. Hence the rise of the Asian markets and the dollar, which rose above 114 yen.
Sydney closed up 0,7% thanks to a boost from commodity companies. Tokyo's Nikkei index rose 0,5% in the final session (it had gained 2,5% on Friday). Japan's GDP growth in the latter part of 2016 was weaker than expected. Seoul +0,2%. The Hong Kong Stock Exchange is up 0,4%, Shanghai +0,5%.
Oil prices showed little movement, stable at around 57,6 dollars recorded on Friday: OPEC members have already implemented more than 90% of the production cuts envisaged by the Vienna agreement to restart the prices of the raw material. A report found this morning that there were only 174 new oil discoveries last year.
Swiss tax reform has been rejected by voters. The new regime, accused of being too soft on multinationals, was rejected with 59,1% of "no", a much higher percentage than expected.
EU GDP AND FORECASTS: NEW EXAMINATION FOR ITALY
Markets are awaited for the publication of Moody's ratings on Italy and France, already scheduled for last Friday. Today Italy returns to the center of attention. This morning Brussels will publish its winter economic forecasts which will not include the correction promised by Padoan by April to return to the parameters.
However, the Commission's document will reveal that the measures announced by Minister Pier Carlo Padoan, if implemented, can fix everything. But time is running out. On 22 February, the EU will publish the report required by article 126.3 of the Treaty on the Italian debt. By this date, President Juncker and the head of economic affairs, Pierre Moscovici, are asking Italy to approve at least part of the maneuver. Tomorrow Istat will release data on GDP for the fourth quarter.
8,5 BILLION BTP AT AUCTION TODAY
Against this backdrop, the Treasury auction of medium-term securities will be held this morning. Between 6,25 and 8,5 billion euros of three-, seven- and 30-year BTPs in issue and two off-the-run bonds will be offered.
On Friday, the spread rose again in the final to 193 just under 200 points. The Btp 10 closed at 2,25%. The yield on the French 1,049-year benchmark has also returned to growth and around 0,985% from yesterday's close at XNUMX%.
The Greek debt situation is still explosive. The 10-year reference rate closed on Friday at 7,603% from yesterday's close of 8,025%, with a rise in price terms of 2,094. Prime Minister Alexis Tsipras warned FM and EU not to "play with fire".
JANET YELLEN TOMORROW IN CONGRESS
Overseas, awaiting the surprises that the meeting between Benjamin Netaniahu and Donald Trump will reserve, the Fed's moves are being watched carefully. Janet Yellen's deputy, Stanley Fischer, warned of the risks of an overturning of the rules on the markets. Tomorrow Yellen herself will take the field for the first of the two parliamentary hearings. You will be an opportunity to update the forecasts on the next rate hike on which the central bank does not intend to express itself before Trump reveals his game. Fed Funds futures indicate at 13,3% the possibility of a rate hike as early as March.
A week full of data for the US market: inflation, consumption and real estate market trends are the most anticipated items. After many remote skirmishes, on Friday President Trump's staff, led by Deputy Mike Pence and Defense Minister Mattis, will face the European counterpart, led by Angela Merkel, at the Munich security summit.
TRIAL OF APPEAL FOR BANKS. SPOTLIGHT ON PRADA ACCOUNTS
The US stock exchanges restart from the highs reached over the weekend. On the other hand, a negative week for the Milan Stock Exchange which suffered from the decline in banks. The FtseMib index closed Friday's session down 0,4%, leading to a weekly loss of -1,3%. The weekly performances of the EuroStoxx50 and the Paris Stock Exchange are in balance, Frankfurt marks +0,1%.
Spotlights still on for Italian banks after the disappointing wave of quarterly reports. The stock most targeted was Banca Popolare Emilia Romagna (-13,7%) in negotiations with Pop Vicenza and Veneto Banca to acquire the 40% held by the two institutions in Anima.
Banco Bpm (-12,9%) and Ubi (-7,9%) are also under fire. Unicredit gets along (-3,5%) in the first week of the mega capital increase. Great expectations this morning for the accounts of Prada. After the positive results of Ferragamo and Kering, the market awaits a new positive signal from the luxury market.
In the USA, the quarterly campaign is drawing to a close. Cisco Systems, Pepsico, Deere and Kraft-Heinz accounts arriving this week. In Europe spotlight on Crédit Suisse and Nestlè. Friday will be the turn of Allianz.
