THE DAM OF BTP AND STOCK EXCHANGE CREAKS. TREASURY AUCTIONS TOMORROW
FED LEADERSHIP: A LIQUIDITY INJECTION IS COMING
The financial markets have had a "predictable" reaction to the announcement of the Prime Minister's imminent resignation, but “we mustn't dramatize”, explains Mario Monti himself, because “the Government is in office” and “the markets certainly needn't fear a lack of decisions” in Italy. A concept that the international press has linked to an imminent descent into the field of Monti as leader, as anticipated by the online "Financial Times" which already confirmed the candidacy of the prime minister in the evening.
For now, the financial markets have paid heed to the outgoing premier and the optimism of François Hollande, who is also convinced that, "in a month or two" Monti will emerge as a leader capable of playing, strengthened by his electoral consensus, a role to absolute protagonist. And so in the afternoon the collapse of Piazza Affari and the spread returned to more "normal" levels compared to the disaster of the morning. But everyone's question is: has the landslide stopped or is it destined to pick up speed?
“I expect that enlargement continues until the first days of the new year – replies to Reuters from London Alessandro Giansanti, strategist of Ing . Today's performance is the result of the explosive mix between the announcement of Monti's resignation and the retracement after the powerful rally of the last few weeks: the spread had tightened too much compared to the risks still existing in the eurozone”. That is, the Bigs have not (yet) sold. But the price they will ask to satisfy the Treasury's requests (about 100 billion between now and the end of February) will certainly be higher.
The spread against Spain, another patient from the periphery, is stable at 80 basis points, in the range shared since last May (between 50 and 100 basis points).
Tomorrow there will be the first test of the market with the auction of 6,5 billion euro annual bots. Thursday will be the turn of three-year BTPs (2,25 billion) and the opening of the issue in 2026 (725 million).
The Ftse Mib index lost 2,2%, had come to yield almost 4%.
The spread with the Bund on the 10-year maturity widened by 30 basis points to 352 basis points (324 last Friday): during the session it had risen to 361 basis points. Today's 4,82-year yield is 4,54% from XNUMX% on Friday.
London, Paris and Frankfurt close just above parity. Madrid lost 0,7%. The three major Wall Street indexes moved higher after a shaky start: Dow Jones +0,11%, S&P500 +0,03%, Nasdaq +0,3%. The news on the Chinese economic recovery more than offset the effect of Monti's resignation.
ASIA
Japan is lagging behind -0,23%, now on the eve of Sunday's vote. The rest of Asia is advancing cautiously: Hong Kong +0,12%. Profits were taken in Shanghai -0,2%, after last week's mini rally (+2,7%).
S&P index futures signal a bearish start to Wall Street's session.
The spotlights are on America, where today the last directorate of the Fed of 2012 begins: Italy is really far away.
AMERICA
More than the hypothesis of a return of Silvio Berlusconi, for now the uncertainty of a failed agreement on the budget weighs in the USA. Time is now running out to arrive at a positive outcome of the ongoing negotiations between Republicans and Democrats that circumvent the "fiscal cliff".
Meanwhile, the FOMC committee, the Fed's decision-making body, is kicking off. It is expected that the meeting, which will close tomorrow evening, will decide on the extension of the Quantitative Easing operation.
The insurance giant Aig -1,3% falls after announcing that it will have to pay 1,3 billion dollars to compensate for the damage caused by hurricane Sandy. This is the highest compensation ever paid by a single company in the US.
In addition, AIG reached an agreement to sell its 80,1% stake in the aircraft leasing company Ilfc to a group of Chinese investors (News China Trust, China Aviation Industrial Fund and P3 Investments) for 4,23 billion dollars with an additional option to sell 9,9%.
EUROPA
The Greek government bond performed well with the 1.198-year spread falling to 56 basis points (-1.200 basis points), it had not fallen below 2011 since the beginning of August XNUMX. This morning the government of Athens announced that the buyback raised securities for a total of 26,5 billion euros, paying them 33,4% of the face value. The goal is to reach 30 billion to cancel about 20 billion of nominal debt.
The euro has been recovering since the early days of this morning: the exchange rate with the dollar is at 1,293 from 1,292 on Friday evening. It had dropped to 1,288 this morning.
ITALY
One hour from the end of the session, Stm was the only positive blue chip. At the end of the day, the balance sheet saw seven blue chips rising out of the forty that make up the FtseMib index.
Standing out among these is Mediaset +2%, also thanks to the "buy" of Deutsche Bank .
On the other hand, the Italian banks are very heavy, all at the bottom of the European ranking in the sector: Unicredit -5%, Intesa -5,1%, Monte Paschi -5,8%, Ubi -4,4%, Banco Popolare -5,7%.
Insurance companies and asset management companies they are not much better: Generali -3%, Mediolanum -6%.
Industrial and utility stocks also fell sharply: Atlantia -3,1%, A2A -3,7%, Enel -2%, Telecom Italia -3,3%, Fiat -3,4%, Finmeccanica -2,1%.
The exception is StM which rose by 4,3% after presenting the new business plan which has as its strong point the exit by 2013 of the joint venture St Ericsson, which produces chips for mobile telephones, chronically making a loss given the customer's hardships Nokia.
Autogrill also goes up +1,5% which won a tender for the renewal of some licenses for the management of duty free in some Spanish airports and Datalogic +1,7%, favored by an operation in the sector fielded by Honeywell.
