The summer of the markets seems to be coming to an end these days when European politics is warming up its engines for the resumption of activity. Official and unofficial news on upcoming financial measures and the risk of a French government crisis are alarming investors, who, after recent record highs, prefer to cash in on the gains made so far. On the other hand, Wall Street offers no solid support and appears semi-paralyzed by the ongoing institutional crisis, after US President Donald Trump called for the reins of the French government. Federal Reserve Governor Lisa Cook and the interested party replied that the dismissal is illicit, since the president “does not have the authority to implement it”.
In this context Piazza Affari loses 1,33% and fell 42.653 basis points, weighed down primarily by banks (for all the big ones, Unicredit -3,61% and Intesa -1,9%). The Milan stock market followed the Paris one for the second day in a row, but the sector's decline is also rooted in some press rumors about possible government requests in view of the budget plan. In particular, reference is made to a probable meeting between the executive and the ABI leaders – next week – on the possibility of finding an agreed-upon solution for a possible new intervention on theuse of tax credits (Deferred Tax Asset) and to have the resources for a flat tax.
On the continent the black jersey of the day once again goes to The main French index, the CAC 40, fell 1,7%. The likelihood of an imminent crisis for the current minority government. Prime Minister Francois Bayrou announced a vote of confidence yesterday, scheduled for September 8th, due to his budget plans, which include spending cuts of €44 billion, tax increases, and the cancellation of two national holidays. The move, which also raises concerns about the financial stability of their French cousins, sent bank stocks plummeting (BNP Paribas -3,83% and Société Générale -6,76%) as well as French government bonds, which saw their secondary spreads widen for the second consecutive day.
In Europe, Frankfurt fell by 0,38%, London by 0,6%, Amsterdam by 0,68%, and Madrid by 0,85%. Overseas, Wall Street is currently flat (Nasdaq +0,07%, S%P 500 -0,02%, DJ -0,09%) awaiting the two key events of the week, such as Nvidia's quarterly results (+0,67%) which will be published tomorrow evening and the PCE inflation data for July.
The euro attempts to rebound
After yesterday's critical session, in light of the first news on the French crisis, the euro is gaining ground slightly today, although still trading below 1,17 against the dollar (exactly at 1,1653). The greenback, on the other hand, is feeling the effects of the Trump-Cook institutional crisis, which is also weighing on T-Bonds, where prices are falling and rates are rising.
Among commodities, gold is strengthening, always a helpful asset in times of crisis. Spot gold has appreciated by 0,4%, approaching $3380 an ounce.and profit taking penalizes oil instead, after yesterday's rally. The most traded contracts, the November 2025 Brent crude futures and the October 2025 WTI futures, are down more than 1,5%. North Sea crude is trading at $67,16 a barrel, while Texas crude is at $63,69 a barrel.
Piazza Affari, Diasorin jumps
In a largely negative Milanese price list Diasorin shines today, +4,72%, which risks being eliminated from the blue-chip club with the upcoming review, but which today benefits from Morgan Stanley's promotion to 'overweight' from 'equalweight', with a revised target price of €101. Saipem also rose +1,03%, Prysmian +0,99%, and Pirelli +0,92% (another candidate to be replaced by Lottomatica, -0,68%). Recordati also performed well, up +0,76%, and Moncler +0,42%.
The declines affect everything the banking sector of the Ftse Mib, from the two largest banks mentioned above to Popolare di Sondrio -3,08%, Mediobanca -2,41%, MPS -2,3%, BPER -1,76%. Risk aversion is also evident in asset management: Azimut -1,83 and Finecobank -1,59%. Stellantis -1,87%, Campari -1,81%, and Unipol -1,49% are suffering.
Outside the main basket it shows off Dry (+13,03%), which appears to be exempt from 15% reciprocal tariffs following the regulatory updates imposed by the US on the EU with the Executive Order of July 31. The company develops comprehensive solutions and technologies for the new generation of digital devices.
Secondary in red for BTPs and OATs, the gap between yields is flattening
The session is negative again on the secondary market and once again the ones driving the downward trend are French government bondsThe 78-year OAT shows a spread with the Bund of the same maturity of 5,34 basis points (+3,5%) and a yield of 2,72%, compared to 3,32% for the Bund. The yield on French bonds is higher than that of Spanish bonds (3,58% for the 86-year OAT) and is slightly lower than that of the BTP (+1,35%). The spread between the Italian XNUMX-year bond and the German one rises to XNUMX basis points (+XNUMX%).
