A "new deal" strategy is looming to address the threat of the epidemic. It moved first this morning the Bank of England which cut interest rates by fifty basis points to 0,25%, and has launched a financing plan for businesses. The pound weakens to 0,876 against the euro, a level not seen since October 2019.
But it is from Italy, the advanced frontier of the emergency, that the strongest measures come. Prime Minister Conte, together with the Minister of Economy Gualtieri, announced an extraordinary plan di interventions in favor of businesses and households for 25 billion euro, of which 12 to be used immediately "to deal with the worst crisis since the post-war period". For now, the ceiling of 3% in the deficit/GDP ratio will not jump, but debts will increase by 20 billion euros. The EU will now have to decide whether to approve further margins of flexibility to increase the 2020 deficit and finance interventions to combat the coronavirus emergency.
Piazza Affari took note without trauma of the expansive turn made forced by the emergency: the Ftse Mib index around 13 is in swing, just under 18 thousand points. Higher increases, but less than 1%, are recorded in Paris and Frankfurt. Madrid +0,2%. London +0,3%. ECB President Christine Lagarde told EU leaders that the bank will review all available monetary policy tools at tomorrow's meeting, starting with TLTRO funding. Lagarde has warned EU leaders that without coordinated action to deal with the coronavirus outbreak, Europe will face a scenario similar to the 2008 financial crisis.
Rates up sharply at the 12-month Treasury auction. Securities worth 6,5 billion were placed, with yields up 39 basis points, again in positive territory at 0,07%. After the auction (and the announcement of government measures) the spread fell below 200 basis points.
Other macro data:
- Brent oil falls, down 2% to 36,4 dollars a barrel. Saudi Arabia warned this morning that it was committed to increasing production to 13 million barrels, beyond the target it provided on Monday. On the other hand, however, Russia, again through the mouth of the Energy Minister, seems to want to return to the negotiating table, which was skipped last week.
- Gold is up 0,9%, from -1,8% yesterday, to $1.660.
- The euro dollar gains 0,2% to 1,130.
In the business square in positive territory Tim +0,8%, that announced the return of the dividend for the ordinary shares at the end of a fast for shareholders that has lasted since 2013. The mini-coupon is equal to 1 eurocent for ordinary shares and 2,75 eurocents for savings shares. As regards 2019, cash generation reached 1,7 billion euros (+198% compared to 578 million in 2018). Net financial debt decreased to 23,8 billion euros, -1,4 billion euros compared to the end of 2018 and by around 0,5 billion euros compared to the third quarter.
Also the banks celebrate the decisions of the executive and the forthcoming launch of Tltro loans by the ECB: Intesa Sanpaolo +1,7%, Ubi Banca +3%, Banco BPM +1,8%. Unicredit +0,7% after reaching +3%: it communicated that the sale of the stake in the Turkish Yapi Kredi is worth about 50 basis points of improvement of the Common Equity Tier 1.
At 13 pm the best stock is Terna +3,65% in the aftermath of presentation of the plan to 2024. Atlantia collapses -4,2% to levels it hasn't seen since 2013. De Longhi -1%. The head office in Treviso, the production plant in Mignagola and all the European factories are fully operational, while the Chinese sites are working to reach full operation. The company is increasing its inventories to guarantee business continuity, also in view of a scenario of prolonged crisis due to the Coronavirus,
