“This deliberate provocation to exacerbate trade problems is nothing more than economic terrorism, economic murder, economic bullying.” Harsh words, especially if spoken by Zhang Hanhui, Chinese deputy foreign minister, to Donald Trump, which confirm that the war between the big names, albeit low-intensity, is already underway. "Don't tell us we didn't warn you" is the title of an editorial in the Quotidiano del Popolo.
The climate in Europe is also warming up. The letter from the European Commission to Italy contesting the failure to reduce public debt pushed the yield on the Bund to its lowest level in the last two and a half years. But the race for government bonds, which has also pushed Spain and Portugal to new negative records, acts as a stopper for the explosion of yields on BTPs, at auction today. And a new wave of expansionary measures by central banks is looming, both in the US and in Europe.
ASIAN PRICE LISTS DOWN, PRESSURE ON HUAWEI INCREASES
Stock markets in Asia, with the exception of those of South Korea and Taiwan, are down. Tokyo Nikkei Index -0,85%. Hong Kong's Hang Seng -0,3%. CSI 300 -1%.
The yuan recovered this morning, yesterday slipping to 6,930 against the dollar, at its lowest in six months. The United States has added China to the list of nine countries suspected of manipulating the currency.
Meanwhile, the pressure on Huawei's customers is increasing: the Japanese Softbank has announced that it has chosen Ericsson and Nokia for the development of 5G telephony. The Chinese threaten to use rare earths, basic substances for electronics and all new information technologies, as a weapon in the confrontation with the United States. In Shanghai Rare Hearts Holding has doubled in price in one week.
Alibaba, the Chinese e-commerce giant listed on Wall Street, has confirmed its intention to move to the Hong Kong Stock Exchange. According to the Economist, there are 174 Chinese companies listed on the US stock exchanges, with a total value of 394 billion dollars.
STILL DOWN WALL STREET. THUD OF CAPRI (VERSACE)
The American markets were also weak, in the red in 4 of the last 5 sessions: the Dow Jones -0,87 fell to its lowest since February 11, the S&P 500 -0,69% at 2783 points, below the technical barrier of 2.800: if today there will be no reaction, the downside could pick up speed. Nasdaq -0,79.
Worth noting is the plunge of Capri Holding -9,85%: the accounts of the Michael Kors company which also controls Versace have disappointed.
The yield on the ten-year Treasury Note, the reference bond, is on the rise to 2,26%, after yesterday hitting its lowest level since September 2017 at 2,22%. On this basis, the market came to expect three interest rate cuts by the Federal Reserve.
THE 3-MONTH BOND RETURNS MORE THAN 10 YEARS
Signs of recession are multiplying. the differential between the yield on the three-month government bond and the equivalent ten-year one is at its lowest in the last twelve years, at -12 basis points. That is, the curve has reversed itself again: the three-month bond yields more than the 10-year one.
Brent oil reached its mid-March lows, at 69 dollars a barrel, it rose again during the night, this morning it is at 69,7 dollars a barrel (+0,3%). Today I will publish the data on inventories. Possible, in the event of an increase in stocks, a drop in prices up to 65 dollars.
At Piazza Affari Eni-1,7%, Saipem -0,2%, Tenaris-1,3%.
OLLI REHN: TLTRO LOANS IN ONE WEEK
In the Old Continent, the negative day was made worse by the letter, which was announced, from the European Commission to Italy. The intervention of Olli Rehn, the Finnish banker who had already sided with the hawks when he was vice president of the Union, came to lighten the pressure. The first interest rate hike by the ECB, he said yesterday, is further away than a few months ago. Rehn added that the ECB will examine options for further supporting the euro zone economy and discuss the details of a new TLTRO operation at next week's summit. But Rehn himself, among the candidates to succeed Mario Draghi, has already replied to Matteo Salvini: the European Central Bank, he said, is not allowed to provide "monetary financing", that is, for example, to act as guarantor for State of a country nor of the entire euro area.
On the currency front, the euro dollar is at 1,114, up 0,1% after three consecutive days of decline.
MILAN STILL IN THE RED BELOW 20 THOUSAND
Piazza Affari closed in the red for the third flight in a row. The index falls by 1,29%, just below the barrier of 20 points at 19.999. 84.
The other markets were also weak: Paris, -1,7%; Frankfurt -1,54%; Madrid -1,2%; London -1,15%.
The United States, in a letter sent on May 7, threatened sanctions against Instex, the financial body created by Germany, the United Kingdom and France to defend money exchanges with Iran. The US Treasury has warned it could ban the US financial system from Instex and any of its associates.
BOUNCES THE CONFIDENCE INDEX
Two Istat indicators on the expectations of consumers and businesses have positively surprised. In May, the Italian consumer confidence index rebounds after three consecutive months of decline, passing to 111,8 from 110,6 in April, the consensus was expecting 110. The index on expectations for manufacturing companies improves from 100,8 of April to 102 of May: expected 100,4.
On the eve of the first medium-long auction after the European ones, the BTP closed a session marked by slight weakness with a plus sign and turned positive on the prospect of a further postponement of the first rate hike by the ECB, after Rehn's words.
SPREAD AT 282, THE BUND AT -0,17%
The signal offset the effect of the Brussels letter. In closing, the spread stopped at 282 basis points from 285 yesterday.
The 2,65-year rate stands at 2,69% from XNUMX% on the previous day.
The Treasury sold all 6,5 billion euros of semi-annual Treasuries offered in today's auction, against a demand of 10,708 billion euros. The average yield on the bond, due to mature on November 29, fell to -0,048% compared to -0,028% at the auction a month ago.
Today the Ministry of the Economy will make available to investors between 4,75 and 6 billion euros on four securities in the medium-long term auction.
In detail, 500-750 million of the CCTEU will be offered in January 2025, 2,25-2,75 billion of the 10-year BTP in August 2029 and 2-2,5 billion in a joint fork for the 5-year BTP in July 2024 and the off- the-run December 2025.
The yield on the German Bund, at -0,17%, is close to the lows of the last two and a half years.
VOLA UNICREDIT, BEST TITLE IN EUROPE
Twist on Unicredit. The stock shot up from -3% in the afternoon to 10,20 euros, closing with an increase of 2,2%. Difficult to explain the rally: purchase recommendations are certainly not enough, such as those of JP Morgan (target 15 euros) or Oddo (target 16,50 euros). The average fundamental target of the panel collected by Bloomberg is 15,68 euros.
However, it is the best stock in the Eurostoxx Banks index.
Entente still weak (-1%). Bank Bpm+1%. Moody's raised its deposit rating to Baa3, having appreciated the decline in non-performing loans. The bank has launched a new organization chart.
HOLDS MEDIASET, SUFFERS THE LUXURY
Mediaset -1%. The Alfa Romeo bought 9,6% of the German television broadcaster ProSiebenSat 1, about 330 million euros at yesterday's prices, thus becoming the first shareholder. In the press release, the company states that the transaction will have no impact on the dividend. The operation is defined as “friendly”.
Sales among other blue chips prevail. Fiat-Chrysler -0,7%. Moody's said last night that the combination with Renault could be "credit positive", but "execution risks" exist. Leonard -2,5%.
Italgas -1,6%. Berenberg raises the target price to 6,40 euros from 6,0 euros. Weak Enel (-2,4%). Triad +3%. In luxury in red Moncler (-3,13%). Ferragamo -2,5%: the president Ferruccio Ferragamo confirmed that the family does not intend to sell. ffff ff
