Red code on the markets, grappling with the nightmare recession. The alarm bell went off in Tokyo: -3,2%, at its lowest for two weeks. Also down was the Korean Kospi (-1,6%), the Chinese Csi index (-0,8%) and Australia (-1,3%). The dollar drops below the 110 yen threshold.
THE INTEREST CURVE SIGNALS RECESSION RISK
The Federal Reserve's borrowing cost projections have convinced markets that the US central bank will not only not raise rates, but will lower them next year. Thus began the bond rally. The 2,44-year Treasury Bill is at 2018%, where it was last seen in early XNUMX.
The yield curve, on the 10-year – three-month maturity, a possible anticipator of the recession in the United States, was inverted on Friday: the differential this morning is negative (-2). This spread has never been negative in the past twelve years. The yield on Japanese ten-year government bonds fell (-9 points to -0,087%), falling to the levels of September 2016.
SPOTLIGHT ON THE IFO INDEX THIS MORNING
Stock exchanges in tension since the opening also in Europe. The markets are awaiting the indications coming from the Ifo, the German confidence index which will provide a more precise indication of economic trends in Germany after the alarm sounded on Friday with the PMI data in a strong and partially unexpected slowdown.
Against this backdrop, the performance of the bond markets assumes great importance: the yield on the ten-year Bund returned below zero on Friday, as it has not happened since October 2016.
Several central bankers will intervene in the coming days to explain the reasons for the Federal Reserve's soft choices: John Williams (New York), Charles Evans (Chicago), Eric Rosemberg (Boston) and Edirh George (Kansas City).
GOLD AND COPPER SURPASS
Tonight the Treasury will announce the characteristics of Thursday's medium-long term auction. Tomorrow the auction of Ctz and Btpei will be held, Wednesday it will be the turn of 6-month Bots (6 billion).
Brent oil is trading at $66,7 a barrel this morning, gaining more than 1% last week.
Gold is at a three-week high at $1.316 an ounce. Copper, considered a strong indicator of the global economic outlook, fell to five-week-ago levels.
ELKANN HAVE THE CHOICE BETWEEN PEUGEOT AND HIUNDAY
The Fiat Chrysler alliance game, relaunched by the rumors of the Wall Street Journal and the Financial Times, will probably take center stage in Piazza Affari: for both, John Philip Elkann is perplexed about the advantages of a deal with Peugeot and does not rule out the Hiunday card. The feeling is that, whatever the choice, times are tighter than previously imagined.
Tim's game is even hotter. On Friday Elliott and Vivendi will compete in the meeting: the French shareholder will ask for the revocation of 5 directors.
BREXIT, TODAY THE TORIES TRIED THERESA MAY
On the international front, the dramatic challenge on Brexit still stands out while, after the pro-EU demonstration on Saturday, the push of those asking for a new vote is growing. After the postponement of the date on the divorce from Brussels, the London Parliament remains for now paralyzed by crossed vetoes, but will have to take a decision by April 12th. Meanwhile, Theresa May's leadership among the Conservatives is increasingly at risk: 11 ministers intend to ask for the no-confidence of the premier already today before the new vote in Parliament.
DAZI, THE NEGOTIATION BETWEEN THE BIG TWO RESUMES
Moreover, the markets are more interested in the forthcoming mission of US representatives to China: Treasury Minister Stephen Mnuchin and the head of Foreign Trade Robert Lighthizer will resume meetings with Chinese representatives tomorrow to try to reach an agreement (although not imminent) on the duties.
On the internal front, after the affirmation of the centre-right in Basilicata, the green light is expected for the so-called decree. The provision that includes Citizenship Income and Quota 100 returns to the Senate for the final vote.
TRIA IN SINGAPORE, DI MAIO IN WALL STREET
A busy agenda for the members of the government with the Economy Minister Giovanni Tria, who will fly first to Singapore, where he will meet the director of the Monetary Authority, the Finance Minister and the heads of the Gic and Temasek sovereign wealth funds, then he will move to China. An American mission instead for Luigi Di Maio, who, among other things, will participate in a breakfast discussion with investors organized by Bank of America Merrill Lynch, will visit the New York Stock Exchange and will have a meeting with the Italian business community.
On the corporate front, it is also worth noting the launch this morning of the capital increase of D'Amico International Shipping (10 new shares for every 11 already owned).
FROM TONIGHT APPLE CHALLENGES NETFLIX AND HOLLYWOOD
Two events are set to characterize Wall Street Week. In a few hours the curtain will rise on Apple's streaming service, which has once again become the most capitalized company in the world. Tonight at the Steve Jobs Theater in San Francisco Tim Cook will reveal the characteristics of the attack on Netflix to give Apple a boost. The first TV series commissioned from Steven Spielberg, Ophra Winfrey and other Hollywood stars will be presented.
LYFT A 23 BILLION IPO BEFORE UBER (100 BILLION)
On Thursday, however, the freshman Lyft, the giant of sharing driving, will make its debut at the Nasdaq. The bankers have anticipated that they have already placed all the securities covered by the initial offer, so it seems almost obvious that the company will be able to mark its debut with a valuation higher than the 28 billion dollars already budgeted.
At this point, it is probable that the Uber IPO, scheduled for the NYSE for next month, could mark an initial price of more than 100 billion dollars.
