The night of Saint Lucia brought many certainties to the markets: in London Boris Johnson wins hands down, peace on tariffs is celebrated in Washington and Beijing. Even the ECB, after the Fed, confirms the soft line on rates. And the markets rejoice.
The euro-sterling exchange rate is down by almost 2%, to 0,829, on the lows of the last three and a half years, following the result of yesterday's elections in Great Britain: The Conservatives are expected to have taken 368 seats in the House of Commons, out of a total of 650.
Wall Street is flying again: Dow Jones +0,79%, S&P 500 +0,86%. The Nasdaq closed up 0,73%.
TRUMP CANCEL NEW RATES, YUAN BELOW 7 DOLLARS
During the night, the White House confirmed that President Trump, as anticipated via tweet, has put his signature on the document that freezes the introduction of new 15% tariffs on Chinese consumer goods equal to 160 billion dollars. In return, Beijing pledges to buy more US agricultural commodities.
Great relief also in Asia. The Chinese Yuan lights up. The dollar-renminbi exchange rate drops below 7, to 6,97, the lowest since July. The Tokyo Stock Exchange is starting to close up by 2,4%, that of Hong Kong by 2% and that of Shanghai by 1,2%.
The MSCI Global index, calculated on 49 stock exchanges around the world, set a new all-time record at 551,84. The yield on ten-year R-bonds rises to 1,8817%.
Brent oil is close to its highest level since September at 64,6 dollars a barrel.
ARAMCO RISES ABOVE 2 THOUSAND BILLION DOLLARS
After just two days of listing, the Aramco stock has already exceeded a valuation of more than 2 trillion dollars, as desired by the Saudi prince Mbs. In reality, according to the estimates of Bernstein's analysts, the real value does not exceed 1.350 billion dollars, in any case well above Exxon (less than 300 billion in value).
EURO RISING, TOWARDS AN AGREEMENT WITH LONDON
The euro appreciated this morning to 1,117 against the dollar, the highest since August. Brussels is not displeased with the outcome of the British vote, which makes it possible to reach an agreement for a smooth exit from London, avoiding the continuation of a long period of uncertainty. Germany has already said it is optimistic about the possibility of a "standard" agreement between London and Brussels by 2020.
Meanwhile, the Scottish question opens up: the Scottish National Party, in favor of remaining in the EU, won 55 seats out of 59. A sensational divorce in the United Kingdom cannot be ruled out.
LAGARDE: “I WILL BE AN OWL EQUIPPED WITH WISDOM”
“Do not make the mistake of exaggerating in wanting to give an interpretation of my words. Do not try to guess and do not cross-reference with those who preceded me. I will be myself and therefore probably different”. This is how Christine Lagarde made her debut in the first press conference as number one of the European Central Bank. “Will it be a hawk or a dove?”, she was asked. “My ambition – she replied – is to be an owl, which is endowed with wisdom”.
Outside the metaphors, in addition to the confirmation of low rates and Quantitative Easing purchases, two passages deserve attention. Speaking of Italy, appreciation for Ignazio Visco's openness to reducing banks' exposure to sovereign bonds in exchange for Eurobonds. Even more important is the launch of the "strategic" review of monetary policy "which will look at every aspect and will need time".
The trade agreement with China, already anticipated in the afternoon by Trump's tweet, has also given wings to European price lists. Piazza Affari closed up 1,02%, at 23.390 points.
Plus signs also for Frankfurt (+0,59%), Paris (+0,4%) and Madrid (+78%). On election day, London rose by 0,81%.
BTP, YIELD AND SPREAD DOWN
The shares toast, the bonds lose their luster. The recovery in risk appetite has caused the BTP yield curve to rise, which follows that of the Bund.
The spread between Italian and German ten-year bonds is down to 150 basis points. The yield of the BTP is 1,23%.
FIAT CHRYSLER SPEEDS UP: THE SIGNATURE DURING THE WEEK
FCA and PSA have made progress on the merger memorandum and could sign an agreement next week, writes Bloombeg. The FCA share (+2,5%) was also driven by the signing of the agreement between Chrysler and the Uaw union.
UNICREDIT AT THE TOP FOR 14 MONTHS, NEXI FLYS
The banking sector, which is recovering strongly, confirmed the positive tone for risk. Unicredit advances (+3,2%) which reaches a 14-month high. Bpm (+2,4%) and Ubi (+4%) also performed well. Mps +2,3%, Entente +1,3%.
Nexi also flies (+2,4%) to a new high for the year: CDP is in favor of a merger with Sia to create a champion of electronic payments.
I ONLY LIKE GREEN UTILITIES
Fight the utilities. The stocks most linked to interest rate dynamics suffer. Down Italgas (-1,3%) and Terna (-0,5%), in line with the industry stoxx (-0,6%).
The companies that produce energy from renewable sources take flight on the expectations of the effects of the "EU green new deal", the objectives of which were announced by the president of the EU Commission, Ursula von den Leyen.
Alerion (+2,36%) and Ternienergia (+8%) run. Enel (+0,6%) and Erg (+0,3%) also performed well.
Safilo loses 3%, which adds to yesterday's plunge (-25%) after the industrial plan of "difficult execution", according to some analysts and after the recent increases.
JUVENTUS, EXCHANGES ON RIGHTS CLOSED
Difficult day for listed clubs. Juventus -2,3% on the last trading day of the rights to the capital increase.
As Roma -2,9%: it seems that Dan Friedkin, potential buyer of the Giallorossi club, and team owner James Pallotta have not reached an agreement on the sale price.
