"With a single phone call Trump tried to enlist the foreign leader for his re-election, put US diplomatic structures at the service of his personal lawyer and used William Barr, the most important exponent of US justice, for his interests" . This is how Bloomberg summarizes Donald Trump's phone call to the President of Ukraine on July 25 to investigate the son of Joe Biden, one of the likely challengers to the White House. This opens a new chapter in view of the 2020 elections, now the most important figure on the geopolitical agenda. Not surprisingly, in search of Wall Street's consensus, Trump yesterday rediscovered the soft tones in the war on tariffs: "The agreement with China - he said - could be closer than you imagine".
THE RUN FOR FED FUNDS CONTINUES
Meanwhile, tensions continue on the wholesale capital market. The liquidity offer conducted yesterday by the New York Fed failed to satisfy the requests, which reached 92 billion dollars, compared to the 75 billion made available. The same happened the previous day. Chicago Federal Reserve Chairman Charles Evans said recent tensions in short-term US financial markets raise questions about the Fed's balance sheet, which may be too tight relative to banks' reserve needs. "Perhaps it's a sign that the budget is tighter than we anticipated," Evans added. Upstream of the technical problems, however, there is the public debt of the United States, which has risen also as a result of the policies desired by the White House. In the first 11 months of the current fiscal year (September 2018-September 2019), the public deficit rose to $1.000 trillion, the highest it has ever been in seven years. Meanwhile, the markets are celebrating the easing of tensions on tariffs.
TOKYO CELEBRATES THE ACCORD WITH THE USA WITH CAUTION
This morning the Tokyo Stock Exchange is up 0,4% in the final session. During the night, a trade agreement was signed between Japan and the United States, with the latter freezing the threat of tariffs on the automotive industry and the former undertaking to buy agricultural products. It's only a preliminary agreement of limited scope, but it's a positive sign.
Hong Kong's Hang Seng index gains 0,3%, the more cautious CSI 300 index of Shanghai and Shenzen loses 0,6%. Kospi of Seoul +0,2%.
Even Wall Street preferred to focus on tariffs and neglected Ukrainegate: Dow Jones +0,61%, S&P 500 +0,62%. The Nasdaq advanced 1,05%.
Fly after the Nike accounts (+4,2%). Philip Morris goes up after the failure of the possible merger with Altria, grappling with the problems of the subsidiary Juul, leader of electronic smoking.
GOLD ETF BOOM. OIL, ARABIA RETURNS TO THE TOP
Gold up 0,4% to 1.509 dollars, from -1,8% yesterday. But yesterday was also a day of overwhelming purchases of ETFs that track the price of gold: +22 million tons, the strongest level in the last four months.
Oil flat: Saudi production is back above 8 million barrels. The WTI trades at 56.63 dollars a barrel (-0,07%). Eni -1%, Saipem -2%
BCE, LEAVE THE SABINE HAWK: HERE COMES PANETTA
One month after Mario Draghi's exit from the top management of the ECB, the confrontation between hawks and doves continues after the latest decisions taken by the president against the opposition of a substantial part of the directorate. Today the publication of the Economic Bulletin of the ECB could offer some more indications on the strategy of Mario Draghi who will speak today in Frankfurt in a hot climate. Sabine Lauterschlaeger, a German member of the board, resigned yesterday in protest against the central bank's latest decisions. The former vice president of the ECB's Supervisory Authority, who has always held positions opposite to Draghi, leaves his office two years early. Almost a gesture of frustration because the Draghi line seems destined to continue. The announcement of frau Sabine, the only woman in the directorate before the arrival of Christine Lagarde came on the day of the news of the arrival of Fabio Panetta on the board of the bank who will support the Draghi line as Christine Lagarde should also do, in arrival at the end of next month in Frankfurt.
MILAN RECOVERS BUT CLOSES IN RED
Milan (-0,51% to 21.788) recovered much of the lost ground in the final after Donald Trump said he was optimistic about the negotiations with China.
Frankfurt -0,57%. Even yesterday the financial news was confused with the crime news. Police inspectors returned to Deutsche Bank to collect materials for the investigation into Danske Bank: The former CEO in Estonia, Aivar Rehe, was found dead in Tallinn. Missing since Monday, he had testified in an international investigation into the laundering of 220 billion dollars which also involves the German bank. Yesterday +0,5%.
Paris was also in the red (-0,70%) despite the positive notes coming from the Capital Market Day of Essilor-Luxottica. In the coming years, the eyewear giant expects an increase in sales in the area of 5% per year and a similar or slightly better trend in profits. Between now and 2023, "mid-single-digit" revenue growth is expected and without "strategic acquisitions".
JOHNSON CHALLENGES MUNICIPALITIES: ELECTIONS TO SAVE BREXIT
Flat London (-0,03%), practically plastered on the day of the reopening of Parliament. In a somewhat surreal climate, Boris Johnson rejects the hypothesis of his resignation while the opposition, comments Giuseppe Sersale of Anthilia, "hesitates to launch a vote of no confidence which would have the only effect of avoiding the humiliation of asking for the extension to 'EU: better left in its juices”.
The bond markets frozen by the impeachment effect have not moved much. The 0,83-year BTP rate stood at XNUMX%, in line with the previous closing.
Bund at -0,57% The German yield curve is flattened as it hasn't been since the Lehman Brothers bankruptcy.
CTZ AT NEW LOWS FROM APRIL 2018
The spread stops in the area of 142 points from 144 at the end of yesterday's session.
The Treasury placed 1,5 billion euros of Ctz in June 2021 with a yield declining to -0,236% minimum since April 2018.
Also placed 450 million of the Btpei September 2041 on an offer range between 250 and 500 million euros.
Today it's the turn of the offer of 6,5 billion Bots in six months. Yesterday on the gray market the issue was traded at -0,17%/-0,20%, against the previous -0,217%.
GENERALI RUNNING WITH ALLIANZ FOR THE AXIS WITH BBVA
Banks closing well above the day's lows. He filed the session in positive territory Mediobanca (+0,6%) on the day the shareholders' agreement met.
Generali also rose (+0,5%), competing with Allianz in the tender for BBVA's bancassurance. On the other hand, the hypothesis of an industrial alliance between the company and Ubi Banca (+1,2%) seems to have vanished.
In red Banca Mediolanum (-1%). The Lazio Regional Administrative Court declared inadmissible, due to lack of jurisdiction, the appeals with which Silvio Berlusconi and Fininvest challenged the Bank of Italy provisions preparatory to the decision of the ECB which in 2016 imposed the obligation to sell the excess stake in Mediolanum 9,99%.
The worst blue chip was Juventus (-2,5%) which continues its decline triggered by the news of the capital increase. Discounts of more than 2% also for Recordati and Amplifon.
FCA (-1,6%), Pirelli (+0,2%) are also in the red among the big names.
