The Treasury bond auction is usually a routine event, but that won't be the case this morning. Indeed, the offer of medium-long term securities comes at a delicate moment for public finances: by Wednesday Italy will have to give an answer to Brussels on how it intends to recover 3,4 billion from the public budget, otherwise the Stability Pact and related infringement procedure.
Furthermore, the efforts to deal with the debt are complicated by a confused political situation, in Italy and abroad, which has contributed to raising the alarm: the spread has widened to 178 basis points, while the 2,24-year yield has risen to 2,32%. This time, therefore, the auction takes on a particular value. The new XNUMX-year bond, offered today for the first time, could offer a yield of over XNUMX%, according to experts. If it goes further, the red alert could go off.
RATES RISE, UNKNOWN ON THE BUSINESS PLACE
The prospect of rising borrowing costs has already hit large, debt-heavy corporations. Eni has lost 5% in five days as has Telecom Italia which will hold the board of directors on the accounts on Friday. Enel is also behind by 5% like Italgas. Terna-4,2%, Snam-3,9%, A2A -2,4%. The resistance of financials and the exploits of Stm (+15%) and FiatChrysler (+10,1%) allowed the FtseMib index to limit the decline to a modest -0,7%.
SILICON VALLEY AGAINST THE US PRESIDENT, DOWN TOKYO AND SYDNEY
Meanwhile, the international situation is heating up after Donald Trump's dramatic tightening on the freedom of entry into the United States for a large part of the Islamic world. In particular, the big names in technology (Alphabet, Apple and Facebook in the lead) have risen up against the diktat by announcing legal support for the victims of the embargo which threatens to be disastrous for Silicon Valley.
The effects of Donald Trump's decision weighed on the opening of the Stock Exchanges this morning: Sydney loses more than 1%, Tokyo -0,7%, conditioned by the leap of the yen, the safe haven currency par excellence in moments of international tension. Conversely, the dollar fell (1,0731 against the euro), as did futures on the US stock market (-0,2%). However, most of the Asian price lists are closed to celebrate the arrival of the year of the Rooster: the Chinese markets, Hong Kong, Taiwan, Korea and Singapore.
AUTO, TOYOTA SENDS THE WORLD RECORD TO VOLKSWAGEN
Toyota has ceded world leadership in car sales to Volkswagen. The Japanese manufacturer stopped at 10,2 million cars (+1,3%) against the 10,3 million of its German rival.
Weak start also for oil: Wti at 52,99 dollars a barrel, Brent at 55,34. The increase in US shale oil production is limiting the effects of the cuts made by OPEC producers.
NO NEWS FORESEEN BY THE TOP MANAGERS OF THE FED AND BANK OF JAPAN
The GDP data released on Friday (+1,9% on an annual basis, only +1,6% in the last quarter) confirmed that it will not be easy to get close to the 4% target promised by the president. Tax cuts and new spending could blow up public finance balances. This will be one of the central themes of the Federal Reserve meeting to be held next Wednesday and Thursday.
Observers are not expecting rate announcements, as the fact that a press conference is not expected at the end of the meeting suggests, so attention will focus on the final release. Even the data on the labor market and on the trend in wages, due out at the end of the week, shouldn't cause an acceleration on the rates front.
The same goes for the Bank of Japan, which will meet exactly one year after the start of the negative rate policy. The economy is improving, but not enough to push Governor Kuroda to change course. Similar script for the Bank of England.
SPOTLIGHT ON APPLE ACCOUNTS AND SPANISH GDP
The quarterly campaign promises to be more eventful. The most awaited appointment concerns Apple, which will present its results on Tuesday. The forecast speaks of 77,4 billion profits in the three months (3,22 dollars per share). According to experts, iPhone sales recovered in the fourth quarter, but more for the 6 series than for the overpriced iPhone7.
In Italy, meanwhile, the parliamentary path of the "save-savings" decree continues. The text will be examined by the Senate on February 2, after the vote on the amendments which will take place from Monday to Wednesday in the Finance Committee of Palazzo Madama. Among the issues to be resolved is the cancellation of the rules on financial education rejected by the Budget Committee due to coverage problems.
In Europe, the Spanish GDP data for the fourth quarter and German inflation are to be followed.
TODAY EXTRAORDINARY BOD OF UNICREDIT, THE INCREASE ON FEBRUARY 6TH
Spotlights today on Unicredit. The bank will hold an extraordinary board today for a preliminary examination of the 2016 accounts. The meeting to approve the financial statements, in fact, will only be held on February 9, after the start of the capital increase (13 billion) set for the 6th. On the other hand, the board that will approve the prospectus and the price range of the offer will be held on Wednesday 3 February. The operation has already received the support of Capital Research, the first shareholder, and Al Aabar, the second. Yes to the increase also from the Crt Foundation and from that of Cariverona. During the week, the stock, which was subject to strong price excursions (linked to rumors about Mediobanca), closed with a XNUMX% increase.
INTESA AND TELECOM QUARTERLY REVIEWS ON FRIDAY
Great expectations also for the board of Intesa San Paolo, scheduled for Friday. Last week the stock lost 8,1% following the announcement of an interest in Generali (+11,3%). Spotlights also on Telecom Italia (-5% during the week): rumors are renewed on a possible agreement between Vivendi and Mediaset which could involve the telecommunications company.
The boards of directors of Banca Popolare di Vicenza and Veneto Banca will meet on Tuesday. The two Venetian banks could approve a first outline of the merger project.
