In Asia it was thought that the session post-Thanksgiving would have been quiet in Asia. Instead, a flurry of data from Japan and above all the stronger-than-expected rise in consumer prices have pushed investors to chase the yen, which is on track to close out its best week in four months. The yen also crossed the $150 threshold, thus leading traders to increase bets on a rate hike by the Bank of Japan next month. Swaps now imply a 60% chance of a quarter-point increase to 0,5%, which would be the highest rate since 2008. The spotlight remains on geopolitics.
While the ceasefire in the Middle East seems to be working, fears remain on the Central European front. Yesterday, Russian President Vladimir Putin Putin yesterday launched another attack against the Ukrainian energy infrastructure, carrying out its threats, after Kiev made use of weapons supplied by the West. European stock markets are seen opening little changed, while the beacon of Unicredit. Orcel goes to Paris to meet Credit Agricole
Le stock exchanges of Asia Pacific are contrasted in a session without the guidance provided by Wall Street, the US financial market was closed for Thanksgiving Day: today it reopens but only for half a day.
The Nikkei of Japan, weighed down by the strength of the yen, fell 0,3%, bringing the index's losses in November to more than 2%, its weakest monthly performance since April. consumer prices in the Japanese capital accelerated in November, remaining above the central bank's 2% target, a sign of increasing pressure on prices. In addition, theconfidence index stood at 36,4 points in November from 36,2 in October, in line with expectations. The index of industrial production in October it rose by 3% on a monthly basis, after the +1,6% recorded in September. However, analysts' estimates were for a stronger growth, of 3,8%. The growth is less than expected retail sales of 1,6% on an annual basis, against expectations of 2,1%, but above the +0,7% of September (revised from a preliminary of +0,5%).
Il dollar fell nearly 1 percent to 150,14 yen, after hitting 149,77 the lowest level since Oct. 21. For the full week, the dollar fell 3% against the yen, its biggest decline since late July.
Traders, who have been undecided since today's data, now see a 60% chance that the BOJ may raise interest rates again in December. A strengthening economy and concerns about the yen's depreciation have recently increased the urgency for the BOJ to act.
Le Chinese stocks were the best performers in Asia, with blue chips up 2% ahead of Saturday's manufacturing and services data, with expectations that the broad manufacturing sector continued to expand in November, albeit at a tepid pace. Shanghai Composite +1,6%, (+2,2% the balance of the whole week and +1,6% the month). Hang Seng of Hong Kong +0,5% (+1% per week and -6% per month). We are back to talking about new support measures economy after news of a policy meeting in December. Nigel Peh, a fund manager at Timefolio Asset Management in Singapore, said speculation included a stabilization fund, a rate cut and the inclusion of house prices in local government performance metrics. “We also think major developers’ home sales in November could see renewed year-on-year growth after October, which should be positive for share prices of real estate names,” he told Bloomberg. Meanwhile i Chinese government bond yields in the long term they fell below the below those of Japan
The titles of the food industry, beverage and restaurant sectors advance after the Ministry of Commerce urged to steadily realize the nation's consumption potential. Tianjin Guifaxiang +0%; Nanfang Black Sesame +10%, Shanghai Laiyifen +6,5%, Shanghai Guijiu +10%, Kuaijishan Shaoxing Wine +5%.
The TAIEX index closed just below parity Taipei (-3% month). Straits Times of Singapore -0,5% (+3,7% per month).
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0,4%, helped by a 2% jump in Chinese blue-chip shares that were flat for the week.
Yields on 2-year Treasuries fell 4,240 basis points in Asia to 17%, the lowest in a month, and fell XNUMX bps for the week, the biggest since early September.
The dollar fell 1,5% against its major peers this week as markets revived hopes for a US rate cut in December. Futures have reduced the odds of a quarter-point rate cut by the Federal Reserve in December to 63%, from 55% a week ago, according to CME Group’s Fed Watch Tool.
The prices of Petroleum rose on Friday, but looked set for weekly losses on the ceasefire agreement between Israel and Hezbollah in Lebanon. U.S. West Texas Intermediate crude futures rose 0,6% to $69,12 a barrel, but were down 2,9% for the week. Gold rose 0,8% to $2.662,36 an ounce, despite the weak dollar, but was on track for a 3% decline for the month, its steepest decline in more than a year.
European stock markets, eyes on Unicredit's moves
Europe looks set for a subdued opening, with Eurostoxx 600 futures trading down 0,15%
Germany. The stocks collapse unexpectedly retail sales in October on a monthly basis of 1,5% after the +1,2% of the previous month and against a forecast of -0,5%. On the year, a +1% is recorded, down compared to the previous +3,8% and below the expectations of a +3,2%. import prices in October on a monthly basis (MoM) +0,6%, up from the previous -0,4% (the forecast was +0,2%).
The main event is the data on'eurozone inflation expected later in the day, with also the ECB forecasts on 1- and 3-year inflation. Economists expect a 2,3% reading for headline inflation, up from 2,0% in October. Risk appears to be on the downside after theGerman inflation has proven surprisingly subdued. Traders have fully priced in a 25 basis point rate cut by the European Central Bank in December, and a rising inflation reading could prompt a disproportionate move of 50 basis points, the probability of which is currently estimated at only 19%.
The following remain under observation: French government bonds, after that Oat/Bund spread this week rose to its highest level since the 2011 European debt crisis, amid doubts over the current government's survival prospects. Although French Prime Minister Michel Barnier has abandoned plans to raise electricity taxes, the far-right National Rally has warned that this concession is not enough to avoid a vote of no confidence as early as next week, which could fall the government.
Unicredit. Orcel is expected to meet Credit Agricole CEO Brassac and other BPM investors (BNP, AXA, Amundi, Lazard), while Credit Agricole would be ready to sell its share to Unicredit, they write The Corriere della Sera and the Newspaper. According to The Messenger, the meeting should take place over the weekend. Interviewed by Financial Times, ECB President Christine Lagarde does not comment on the possibility of a merger between Unicredit and Commerzbank. “I have said publicly that cross-border mergers are generally advantageous if they produce added value.” Yesterday, a Unicredit source said that “The number indicated by Banco Bpm is pure conjecture,” referring to the alarm raised by Banco BPM CEO Giuseppe Castagna in a letter to the group’s 20 employees, in which he quantified approximately 6.000 redundancies following the possible integration with Unicredit.
Bpm bank. Moody's affirmed the ratings of after the Italian bank received a €10,1 billion takeover proposal from UniCredit. The affirmed ratings include the Baa1 long-term deposit rating, the Baa2 long-term issuer and senior unsecured ratings, and the Baa3 base credit assessment.
Generali An article from Il Sole 24 Ore adds further details on the potential agreement between Generali Investments and Natixis Investment Managers: talks are said to be ongoing but nothing has reached the board of directors. The perimeter involved in the negotiation would be that of Generali Investments Holding, or 660 billion at the end of June. On the other side there would be a fraction of the assets managed by Natixis, the total is 1,27 trillion euros.
