Long live Mexico. The agreement between the US and its neighbor south of the Rio Bravo represents the first positive sign in the tariff game, which is shaking the global economy. The understanding provides that 75% of auto components must be made in the two countries (compared to the current 62,5%) and that 40-45% of the components be produced by workers who earn at least 16 dollars an hour who will be guaranteed new trade union rights: the irony of history wants an anti-global leftist request to be made possible by the diktat of the most reactionary US president.
The agreement, which will only be signed next Monday, marks a point in favor of Donald Trump in the most difficult moment of his presidency but, above all, offers a window to get out of a high-risk situation, capable of compromising the positive trend of the global economy, reported yesterday (the only exception, alas, Italy) by the OECD. The agreement is only a first step and does not involve, for now, Canada, the third partner of the old NAFTA. But the markets are already anticipating positive developments for Europe for the thorniest dossier, the Chinese one. And so the stock exchanges rejoice at all latitudes:
FIAT CHRYSLER ALSO FLIES TO WALL STREET
- On Wall Street, the Dow Jones index rose by 1,01% to 26.049,64, S&P 500 +0,77%. The Nasdaq breaks the wall of 8 points (+0,91% to 8.017,90).
- Car titles take off. Among the most euphoric Fiat Chrysler which, after closing in Milan with a rise of 3,5%, dragging the index of Piazza Affari upwards, continued the race on Wall Street +4,3% together with GM +4,7 .3% but ahead of Ford +2,21%. Euphoria also in Europe; the auto motive index scored a rise of XNUMX% under the pint of the German groups.
- The easing of trade tensions is holding back the rise in the dollar, the euro recovers to 1,1680. The yen also strengthens (111,28 against the US currency) but this does not prevent Tokyo from rising +0,25%, driven by the auto giant. Toyota +1,08% announced a $500 million investment in Uber.
- Only the Chinese squares mark time. According to Jp Morgan the agreement Mexico/USA does not favor peace on tariffs between Beijing and Washington.
RECORD CLEARS ALSO FOR TENARIS
Little moved the oil compared to highs on Friday: Brent at 76,21 dollars.
The agreement on tariffs with Mexico gives wings to Tenaris + 1,7%. Eni +0,2%, Abu Dhabi National Oil Co is in an advanced stage of negotiations with a number of partners, including the Italian group, to sell minority stakes in its refining subsidiary. The business is worth $20 billion. Saipem + 0,2%.
TRIA IN BEIJING SEEKS TO RELEASE DEBT STRESS
Eyes focused on BTPs, yesterday at 3,16%, a level it had not seen since May 2014. The Minister of Economy, Giovanni Tria, on a visit to Beijing, hastened to defuse the tensions raised by Deputy Prime Minister Luigi Di Maio who he had spoken of a “very hot autumn” ahead. In an interview with China Radio International, Tria explained that the objective of the mission is to strengthen economic relations between the two countries, certainly not to seek buyers for public debt securities.
“We don't have this problem” he specified “Chinese investors will evaluate whether to buy Italian securities, just like investors from other countries or Italians. To date, those who have done so have not regretted it and I am confident that the positive judgment on Italy's financial stability will strengthen when the Italian government's budgetary policy takes shape".
GERMAN CONFIDENCE PUSHES EUROPE
A positive opening is expected for the European markets yesterday supported both by Wall Street records and by the US-Mexico agreement but also by the excellent data of the Ifo, the confidence index of German companies which has stood to 103,8 points in August, up from 101,7 points in July.
- In the end, Piazza Affari also survived, in negative territory for a good part of the session: the Ftse Mib closed at +0,27%, to 20.797 points.
- Frankfurt +1,16% was the best stock exchange. Paris +0,86%, Madrid +0,73%, Zurich +0,48%. London closed for the Bank Holiday holiday.
ITALY REMAINS THE LEGEND OF GROWTH
Italy is the only G7 country which, in the second quarter of the year, recorded a slowdown in GDP: +0,2% between April and June 2018, from +0,3% in the previous quarter compared of the overall improvement of the 36 countries of the Organization (from +0,5% to +0,6%). The area as a whole instead increased from +0,5% to +0,6%. The brightest are the United States, +1% from +0,5%; leap in Japan, +0,5% from -0,2%; Germany +0,5% from 0,4%; United Kingdom, +0,4% from +0,2%. France stable, +0,2%
Illiquid debt market awaiting the tour de force which begins today with the Ctz auction and concludes on Friday evening with the Fitch rating.
CTZ, YIELDS SEEN IN STRONG GROWTH
The declarations of Deputy Prime Minister Luigi Di Maio and Northern League president Alberto Bagnai have overheated the already scorching picture of the Senate Finance Committee. The first said that "Autumn will be very hot, if summer was like this you can't imagine what autumn will be like, with the strong powers that are waging war on us right now" adding that the government intends to pass a "courageous budget law which puts citizens at the centre, but if in Europe they have treated us like this on immigration, I imagine what they will do on the accounts”. The second one he called the 3% deficit ceiling “without scientific basis”.
Il yield on ten-year BTPs thus rose to a maximum of 3,2%, the spread at 282 points.
Today auctions kick off with bids of 1,25-1,75 billion Ctz March 2020: at the close of the secondary security it shot up in area 1,3% from 0,647% in the previous auction.
THURSDAY 7,5 BILLION BTP OFFERED
The Italian Treasury will make available to investors between 6 and 7,75 billion euros in medium-long term government bonds in the auction scheduled for Thursday 30 August.
The offer includes the launch of the new 5-year BTP, expiring on 1 October 2023, which will be offered for an amount of 3-3,75 billion and will pay a coupon of 2,45% against 0,95% of the current benchmark March 2023.
In addition to the Fiat Chrysler leap, the Milan Stock Exchange was able to count on the partial recovery of bankers, negative but above the lows of the session that had conditioned the Milanese morning.
THE BATTLE FOR CARIGE WARMS UP +2,2%
Closing above the lows of the day for banks: Intesa completely eliminated the decline unlike Unicredit -1,36%, weak Banco Bpm -0,34%) and Bper Banca -0,40%), positive Ubi Banca+0,42 ,XNUMX%.
Banca Carige closed up 2,20% after Raffaele Mincione presented his own list of candidates for the renewal of the Board of Directors with the confirmation of Paolo Fiorentino as CEO and the signing of a union agreement with the shareholders Giuseppe Volpi and Aldo Spinelli who will therefore support this list.
MONCLER LEAP FORWARD, THE "ELECTRIC" PIAGGIO
Leap of Moncler +1,79% after CEO Remo Ruffini explained that he has no intention of investing in other brands "because there are still too many things to do" in the company.
Flash at the end of Atlantia +0,91% after a dull morning. The market is starting to buy back the stock, heavily penalized after the collapse of the Morandi bridge in Genoa.
Piaggio accelerates +2,72% in the afternoon after announcing that production will start in September vespa elettrica. It will be the first innovative product in the motorcycle portfolio. The society it closed the first half of the year with a net profit, which reached the figure of 26,7 million euro, up by 26,2% compared to the same period last year.
Thump of Salini -3,4%, Ethiopia canceled a 4 billion contract for a dam, of which the company is the main contractor.
THE JUVE STAR SHINES +16,4%
Juventus was the undisputed star of the market, with a rise of 16,41% which made the capitalization at 1,16 billion. The black and white rally, which has infected Rome +7,42% and Lazio +4,57%, is undoubtedly a result of the Cristiano Ronaldo phenomenon but it also finds an explanation in the stellar ratings attributed by English analysts to some teams such as Liverpool and Chelsea in the event of a sale.
Imi Bank In the meantime, it is reviewing the club's recommendation and target (currently stopped at 0,70 euros) in the light of performance: since the beginning of the year, the gain is +54%. At 1 year ago +68%, at 3 years +353% and at 5 years +477%. Despite the increases, the stock is still below the absolute highs reached in 2002 at 1,387 euros, shortly after the IPO, but has now forgotten the lows (0,147 euros) reached in the darkest years, before the recovery under the guidance of Andrea Agnelli.
