After a year of records, the Stock Exchanges are starting the year with a new injection of energy coming from the Big Ones.
China's central bank has announced it will cut reserve requirements by 50 basis points effective January 6. This decision confirms Beijing's willingness to restart growth, which has remained at its lowest level for 30 years. The drop in the compulsory reserve allows 114 billion dollars to be freed up to support credit and thus relaunch the growth of the Asian giant.
At the same time, confirmations are arriving from the USA on the forthcoming signing of the trade agreement: Donald Trump has guaranteed that the agreement on "phase one" will be formalized by January 15 with a ceremony in the USA "at the highest level" (although it is not the presence of Xi is expected).
XI AND TRUMP TOWARDS PEACE: SIGNED ON JANUARY 15
Beijing's decisions have given new life to the bull: this morning the CSI index of Shanghai and Shenzhen recorded a rise of 1,3%, which follows the rise of 31% on December 0,3st, the same gain recorded on Wall Street in the last session of 2019.
The other price lists in the Asia Pacific area are also positive (+0,35%). Taiwan rises (+0,51%) just a few days after the vote, this time particularly delicate. Contrasted Sydney (+0,2%). The Tokyo Stock Exchange is closed for holidays.
Oil still up this morning (Brent at 66,24 dollars a barrel) and gold, at 1.519,64 an ounce.
The rise of the yellow metal is favored by the weakness of the dollar against the yen (108,64) and the euro, which opens the year at 1,1222 (+0,11%).
NEW LIQUIDITY FROM THE FED. PMI DATA TODAY
The upward push continues to be supported by central bank action. In the last session of the year, the Federal Reserve injected more than 25 billion dollars of liquidity to avoid the risk of the credit crunch: during the year, the interventions reached the figure of 255,6 billion dollars in the system ). Overall, the situation appears much less tense than a year ago: the cost of financing on the repo market (repurchase agreements) is around 1,55%, compared to 6% at the beginning of 2019.
To follow, especially in Europe, the data on the performance of the main manufacturing economies, as will emerge this morning from the publication of the PMI indices. In the USA, the release of data on unemployment benefits and the trend in consumer confidence is also expected.
On the central bank front, the most important data of the week will concern the publication of the minutes of the Fed and ECB meetings in December.
GHOSN ESCAPE FROM TOKYO THANKS TO GREGORIAN CHANTS
But the attention of the markets will be concentrated on examining the many novelties that emerged in a year-end full of fireworks.
The effects of Carlos Ghosn's daring escape from Japan to Lebanon are under examination, perhaps thanks to the help of a company of Gregorian chants invited for the Christmas concert: the manager would have hidden himself inside the trunk of instruments. Beyond the next developments of what promises to be a sensational financial thriller (starting with a prison break worthy of Papillon), the key question is whether and how the Renault-Nissan-Mitsubishi alliance will withstand the shock. Yesterday Ghosn, who took up residence in Achrafieh, near Beirut, in the villa paid for by Nissan, was received by the President of Lebanon, Michel Aoun. His highly anticipated press conference will be held on the 8th.
BOLLORÉ TOASTS WITH ROCK: 3 BILLION FOR 10% OF UNIVERSAL
In anticipation of the duel at the Mediaset assembly on 10 January, Vincent Bolloré has scored a big coup: the Chinese giant Tencent has taken over 10% of Universal, the music major controlled by the French tycoon, on the basis of a stellar valuation: 30 billion euros. In this way Bolloré settles the group's financial situation and prepares to play the Italian games without anxiety: in Telecom Italia, Vivendi, with a 24% strong stake, holds the agreement with Elliott partner; the situation in Mediaset is more complicated, from which Bolloré, according to what he writes Les Echos, is ready to leave, accusing a loss of 200 million. However, Fininvest is struggling to find new travel companions.
BENETTON HOSTAGE OF THE HIGHWAYS
In Piazza Affari, the match on Atlantia's future is hotter and hotter. Luigi Di Maio stressed yesterday in a video on Facebook that the Milleproroghe decree, which came into force on January 31, has "started a path" that will allow the government to revoke the concessions to the Benettons. Some 95 percent of Italy's motorway network will not be affected by any toll increases this year, the ministry said.
The Milan Stock Exchange took its leave of 2019 with a modest decrease, -0,8%, which certainly did not compromise the performance for the year, just under 30%.
The intervention on Banca Popolare di Bari is also in the spotlight. The Interbank Fund, which protects the deposits of banks active in Italy up to 100 thousand euros, has decided to invest up to 700 million in the capital increase of the Apulian institution , scheduled for the second half of 2020 and estimated at 1,4 billion (the other half will go to Mcc, a subsidiary of the Treasury).
