More than two million people, that is one in three citizens of the former British colony, took to the streets of Hong Kong yesterday to demand the definitive withdrawal of the law on extradition to China and the immediate resignation of Governor Carrie Lam, who also publicly apologized for Wednesday's brutal police action.
THE HONG KONG PROTEST IS GOOD FOR THE MARKETS
The protest, the most massive in history, pleases the markets: the Hong Kong Stock Exchange rises by 1,4%, Chinese stock markets are also positive.
The Tokyo Stock Exchange is weaker, just above parity. The market is already focused on the meeting of the Bank of Japan which on Thursday should strengthen its expansionary policy with new measures.
The dollar rises to a two-week high: the euro trades at 1,222 against the US currency.
Gold remained unchanged at around 1.341 dollars.
Oil rose slightly this morning: Brent at 62.24 (+0,4%). Secretary of State Mike Pompeo said the US would undertake to guarantee the movement of ships in the Persian Gulf.
Bitcoin is also advancing to $9.391, the highest in 13 months.
COST OF MONEY: IT IS CUT BUT ONLY IN JULY
In the spotlight of the markets are the central banks, starting with the meeting of the directors of the Federal Reserve, which will announce its monetary policy decisions on Wednesday evening. The markets expect a rate cut only at the next meeting in July (88,4% of the experts expect a drop of a quarter of a point) but everything will depend on the data, especially on inflation and growth, being examined in recent days. At a 2,10% yield on the 2-year Treasury Bill, with inflation expected to be below XNUMX% over five years, the markets are pricing in several cuts in the cost of money over the next twelve months, after the one in July.
The US Treasury will announce tonight the amount of foreign investment in the US T bond, a figure of great political importance after the decline in the stock held by China emerged in March.
Also released are the Empire Manufacturing and NAHB Real Estate Indices and Net Purchases of Financial Assets
THE JAPAN AND BOE MEETINGS ALSO START
The next day, in addition to the Central Bank of Japan, the Bank of England will meet. The second round of Theresa May's succession challenge is underway in the United Kingdom: Boris Johnson starts as a great favourite.
The meeting of the Central Bank of Brazil and that of Norway are also scheduled for the week.
Tonight, for the last time, Mario Draghi will do the honors of the house in Sintra, the splendid Portuguese castle where the annual meeting of the ECB is held. In the past the event has lent itself to very important announcements, who knows if superMario doesn't reserve one last surprise: in his opening speech the banker could outline a picture consistent with a new lowering of deposit rates, i.e. what banks pay to leave liquidity in Frankfurt. From -0,4% it could go down to -0,5%.
The first final meeting will also be held during the week for the choice of the banker who will take Draghi's place from October.
DB, BAD BANK TO BE STARTED FOR 50 BILLION EUROS
Meanwhile, the European banking system is about to experience a sensational change. The biggest cleanup operation in banking history is about to get underway. Deutsche Bank, anticipates the Financial Times, is about to transfer assets for an estimated value of around 50 billion euros to a bad bank. In practice, the institution will get rid of a large part of its skeletons in the closets, from derivatives to assets accumulated by the bank in the United States, the source of repeated losses and scandals. The operation will be announced by the CEO Christian Sewing in mid-July on the occasion of the half-yearly. “It will be a radical cut – an anonymous source explains to the newspaper – We are doing it today because we have put together enough means to manage the operation. We couldn't before." In short, a gigantic bail-in that will have a great effect on the prospects of the banking union.
Among the important data for the next few days are also the ZEW indices of Germany and the PMI data of the Eurozone.
PUBLIC ACCOUNTS, THE ITALIAN RESPONSE TO THE EU ON FRIDAY
Public finances will be at the center of the Italian economic week. The expected reply with which the Italian government hopes to convince Brussels not to trigger the excessive deficit procedure should arrive by Friday. Procedure on which the Commission has already expressed its positive opinion, however deferring a definitive decision to the individual States. Eventually Ecofin will give a possible go-ahead at the meeting on 9 July if the Conte executive does not provide adequate guarantees on compliance with European parameters.
Meanwhile Matteo Salvini's visit to the USA is underway.
The distribution of a tranche of the Stm dividend (0,06 dollars) is on the agenda in Piazza Affari.
WINDS OF PEACE FCA-RENAULT, AIRBUS DEL MARE TAKES OFF
Fiat Chrysler's performance to be followed on the market: Mike Manley's mission to Paris after the clamorous pro-merger stance by Renault CEO Jean Dominique Sénard brought up to date the agreement with FCA.
First test on the Stock Exchange also for Juventus after the announcement of the arrival of Maurizio Sarri at the helm of the bianconeri.
In the spotlight too Fincantieri after the signing of the alliance with Naval group. Leonardo should also be followed, who should be involved in the operation.
