“Central banks sometimes have to do unpopular things for the health of the economy. We have seen bad economic results in countries where central banks have had to give in to pressure from politicians”. So Janet Yellen, in hers speech yesterday in Congress, wanted to reiterate the need to defend the independence of the Fed and warned parliamentarians against the abolition of the Dodd-Frank act, the finance reform launched by outgoing President Barack Obama after the 2008 crisis. positive” and it would not be appropriate “to turn back the hands of financial regulation”, declared the chairman of the Federal Reserve.
But the Fed president, who has said she wants to reach the end of her mandate (spring 2018), has sent the most awaited signal: rates will rise "relatively soon", as new president Donald Trump wants, who has not skimped on election campaign attacks against the dove of the Fed, accused of having delayed the rate hike to favor the Democrats.
In reality, judging by the state of the economy emerging from the latest data, Trump can only be grateful to the head of the Fed. New housing constructions soared by 25% in October to 1,32 million, the highest since nine years, well beyond expectations (1,15 million). New jobless claims fell to a 43-year low, at 235.000. And the consequences were not long in coming.
IT BOND RISES AGAIN. MEXICO RAISES RATES
The advance of the dollar continues, up from nine sessions in a row. A Guinness Book of Records performance that pushed the US currency over 110,34 against the yen and to 1,0620 against the euro, the lowest for the year.
The flow of capital to the US market is also accelerating: 30 billion dollars of monetary funds have resumed their way home in the last week. A migration stimulated by the rise in yields, in turn supported by the expectation that the combination of lower taxes, fewer regulations and more infrastructure spending is destined to favor inflation. Thus the yields of T-bonds 10 rise to 2,338%, the two-year bond rises to 1,1071, a record since February.
On the other hand, emerging countries pay a high price. Yesterday Mexico raised its rates by half a point, in an attempt to stop the capital hemorrhage unleashed by Trump's victory, who wants to review the NAFTA rules, vital for the Mexican economy (80% of exports go to to the States). The US protectionist squeeze will be at the center of the meeting of the APEC, the association that brings together the countries bordering the Pacific, where Barack Obama will speak on Monday.
SALE TOKYO, ABE: TRUMP DESERVES TRUST
In terms of price lists, Meteo Borse predicts clear weather, except for widespread rainfall on the Italian banks front, which escapes the general trend.
The Nikkei week is about to close up, +1% thanks to the dollar's boost to exports. Meanwhile, the Bank of Japan continues its interventions to curb the recovery in yields on JGBs driven by T bonds: "We do not want - said Governor Hatuhiko Kuroda - that our monetary policy be dictated by others".
The meeting between Trump and Prime Minister Shinzo Abe at the Trump Tower ended under the sign of the utmost cordiality. "International relations require trust - said the premier of Tokyo - and this is a man I can trust".
The other Asian lists were weaker: the Asua Pacific index fell by 0,4%. All the main stock markets in Asia and the Pacific moved little, starting with those of China: Hong Kong +0,1% and Shanghai -0,1%. Seoul loses 0,3%, Mumbai -0,1%.
WAL MART THUD. OIL SUMMIT IN DOHA
Meanwhile, Wall Street's honeymoon continues with the new presidency. The S&P 500 index rose 0,47% to 2.187,12, just a whisker from its all-time record (2.190,15). NASDAQ +0,74%. The Dow Jones (+0,19%) was less brilliant, held back by Wal-Mart (-3,7%). Revenues disappointed, rising 0,7% to $118,2 billion, slightly less than estimates.
The recovery of the real estate market drives Home Depot upwards (+2,9%). Fly Best Buy (+13,7%), driven by the increase in sales of consumer electronics.
The oil market today looks to Doha, where some of the major OPEC producers are meeting (the presence of Russian energy minister Alexandr Novak is not excluded) in search of an agreement to be signed at the Vienna summit on November 30th.
Brent crude is stable at 46,65 dollars a barrel (+11 cents), Wti at 45,63 (+6 cents). At Piazza Affari Eni +1,4%.
MILAN FLAT, POSITIVE FUTURES FOR EUROPE
The rise of the dollar against the euro, which has started to fall below 1,06, is the figure which characterizes the European stock markets and which is destined to influence the next meeting of the ECB, which will confirm the expansive policy for now. But board member Yves Mersch sent out a signal yesterday: the ECB must reduce its asset-purchase program as soon as possible, although this will take time. A speech by Mario Draghi is scheduled for this morning in Frankfurt: it will be an opportunity to reaffirm the line of the central bank.
European stock futures anticipate a flat start. Difficult day yesterday for the Italian price list which, after reaching an intraday low of 16.348 points, closed at 16.555 points on parity (0,03%). The other European markets were more solid: Paris +0,51%, Frankfurt +0,19%, London +0,65% and Madrid +0,74%.
The debt market was very mixed: the Btp/Bund spread, after rising above 183 basis points, closed at 181,627. The Italian ten-year bond ended the session at 2,03% from 1,97%. The gap between US Treasuries and Bunds is also widening, now close to 200 basis points.
BLACK DAY FOR BANKS, UNICREDIT UNDER FIRE
Day of passion for Italian banks. The fund's index lost 2,44% after plunging as much as 4% to its five-week low. A decline that contrasts with the 0,3% increase in the European index.
The fall was triggered by Unicredit: -4,7% after the anticipation of the Sole 24 Ore on the next capital increase of 13 billion euros and a securitization of non-performing loans worth 20 billion. The prospect of adjustments to non-performing loans for 7-8 billion weighs even more. The upward correction of provisions prompted operators to simulate higher charges also for other institutions.
In the last part of the session the purchases returned. Intesa Sanpaolo recovered and closed with -1,1%, Ubi Banca, invested by the investigations of the Brescia judiciary on the alleged secret pact in which Giovanni Bazoli is allegedly involved, lost 1,7%. Monte Paschi continues to decline (-3,3%). The worst performance was by Banco Popolare (-5,5%).
Mediobanca was also in the red, -2,2% on the day of the big turnaround. The company has announced an industrial plan to focus on asset management which provides for the purchase of the stake it does not yet own in Banca Esperia. This is 50% of the company specialized in the management of large estates, paid 141 million euros.
Generali-1,8%, halves the loss in the final. The Financial Times wrote that Mediobanca is ready to sell part of its stake in the insurance company to finance its growth plans in new business areas.
Banca Mediolanum-1,1%: the capital gain on the sale of Banca Esperia amounts to approximately 41,5 million net of taxes.
GROS-PIETRO: BASEL'S RESPONSIBILITIES
Gian Maria Gros-Pietro, president of Banca Intesa, spoke on the situation of the banks yesterday in a conference in the Chamber. According to the bank's number one, at the moment “there is a tendency, pushed by the Basel committee, to further raise the level of capital required of banks. This, paradoxically, to reduce the risk. But if the banks finance the real economy and if an increase in the capital endowment is requested for the same loans and we are in a situation in which the return on equity capital of the banks is lower than the cost of stock market capital, it is clear that the banks cannot increase their own capital endowment, they can only reduce loans".
This, he continued, has "the effect of increasing risk, because if these banks have a risk that essentially depends on the fact that their customers are no longer able to pay, cutting their loans increases the risk". However, Gros-Pietro noted that Intesa managed to bring about 40 debtors back to performing status.
SUPERSTAR LUXOPTICAL. UBS MAKES DE LONGHI FLY
Fiat-Chrysler -0,3%. Car registrations in October in Europe fell by 0,3% on the year, to 1,141 million, with the FCA group moving against the trend, reaching 75.108 vehicles sold, +6,6% on the year.
Strong Luxottica (+3,68%) and Buzzi (+3,27%), the best stocks in the main list. Prysmian +1,11% after Morgan Stanley raised its target price from 24 to 27 euros. Outside the Ftse Mib De Longhi leaps by almost 9 after the promotion to "Buy" by Ubs, which also raised the target price by 13%, to 26 euros.
Beni Stabili gains 2,5% after announcing the creation of a Sicaf (60% company and 20% each Credit Agricole Assurance and EDF Invest) to which Telecom Italia's real estate portfolio and related debt will be transferred.
Rai Way +1,56%: Citigroup has lowered the target price of the share from 4,6 to 3,5 euros, but the level still remains above the current list prices.
