An uncertain climate on the financial markets, which remain screwed into the "more inflation-less growth" spiral somehow reaffirmed today by the International Monetary Fund, even if the 2021 estimates for Italy improve. The European lists close mixed, in the wake of the losses of the Asian stock exchanges (with Evergrande always appearing closer to failure) and did not find great inspiration in the afternoon in the volatile performance of Wall Street. Piazza Affari scores a small increase, +0,23%, 25.990 basis points, thanks above all to the purchases of Prysmian +3,55%, Diasorin +2,72% and some utilities. The banks, the true barometer of the price list, are not moved much. In the rest of Europe the best is Madrid, +0,47%, while Frankfurt -0,36%, Paris -0,34%, Amsterdam -0,25%, London -0,23% are lagging behind.
On the foreign exchange market, the euro remains weak and trades slightly against the dollar at around 1,153, weighed down by the pessimism of German investors, who show a falling sentiment for the fifth consecutive month. The Zew index drops by 4,2 points in October much worse than expected, due to bottlenecks in supply chains which weigh heavily on Europe's largest economy. "The economic outlook for the German economy has deteriorated significantly," says Achim Wambach, president of Zew. "The further decrease in the indicator is mainly due to the persistent problems on the supply chains of raw materials and intermediate products".
For these reasons, the recovery is also losing momentum at a global level and the IMF, in the introduction to the World Economic Outlook released today, attributes much of the blame to the Delta variant of Covid 19. The forecasts are only limited, "but this general figure masks marked downward revisions in some countries”. According to the IMF, the new outbreaks of Covid that have arisen in some critical junctions of global supply chains have caused higher than expected shortages, further pushing inflation in many countries. And the impediments to activity, in sectors where interpersonal contacts are intense, have caused a significant delay in the recovery of the labor market compared to GDP. The risks are therefore considerable and for the chief economist Gita Gopinath "if Covid-19 had a prolonged impact in the medium term, it could reduce global GDP by a cumulative 5.300 billion dollars over the next 5 years".
For this year the revision is slightly downwards for China, while it is upwards for the Eurozone and in particular for Italy, whose estimated growth is 5,8% against 4,9% previously. For the USA, on the other hand, the forecast drops by as much as one percentage point, to 6% from 7%, and is accompanied by downward estimates for the stars and stripes economy already published by Goldman Sachs. All while awaiting the start of the quarterly season during the week, which can say a lot about the state of health of North American companies. We start tomorrow with JPMorgan (while in Europe the French Lvmh is now giving, with closed markets, the first indications on luxury with the circulation of the quarterly).
Tomorrow the minutes of the last Fed meeting will also be published and the awaited data on inflation will come out, which could provide useful indications to the US central bank. In this climate T-Bonds move cautiously, with the 1,6-year Treasury yield around 9%, virtually unchanged from yesterday. In equities, CureVac stock (-83%) is under observation after the German company announced its decision to withdraw its coronavirus vaccine candidate from the current approval process underway at the European Medicines Agency. At the moment, raw materials are not holding big surprises. Oil is moving in slight progress, Brent is over 80 dollars, while WTI trades in a range between 81 and XNUMX dollars.
In Piazza Affari the best blue chips today, after Prysmian and Diasorin, are Saipem +2,41%, A2a +2,06, Finecobank +1,63%, Terna +1,4%. In asset management, Banca Mediolanum also continues to shine +1,32%. Profit-taking weighs on Tenaris -1,67% and Stm -1,63% and Moncler -1,09% lost share. Atlantia is down by 0,81% despite the 300 million order in Chile for Abertis. The market is focusing on the Spanish subsidiary for which Il Sole 24 Ore hypothesizes a reorganization of the governance and the possible entry of new shareholders. The changes in bank shares range from Bper -0,39% to Mediobanca +0,97%, recovering after yesterday's slide.
In the bond the spread goes down between the ten-year Italian and German, above all due to the rise in the yield of the latter. The differential closes at 105 basis points (-2,68%). The rate of the BTP remains at +0,91%, while that of the Bund rises to -0,14%. At the European level there is the great success of the maxi Green bond, from the EU, a 15-year bond for 12 billion euros, aimed at financing the interventions of the Next Genteration Eu. Demand from institutional investors quickly surpassed 135 billion, a true record.
From the central bank front, it is interesting what Francois Villeroy de Galhau, number one of the Bank of France and member of the ECB governing council, said in an online conference. The governors - he maintains - are discussing the hypothesis of transmitting to the PSPP (ordinary purchasing programme) part of the flexibility inherent in the PEPP (pandemic program which should end in March 2022), but also the possibility of launching a new purchasing program tout court . The Pepp enjoys greater flexibility regarding purchasable asset classes and capital keys. Furthermore, the Pepp is not set to fixed monthly amounts but purchases are adjusted according to changes in financial conditions where they occur.
