When uncertainty grows, the money takes refuge in safe havens. The rule is confirmed by the sharp increase in US bond and stock purchase flows: 64 billion dollars in June, the latest data available, the highest for 14 months. Judging by the trend of the US indices, it is not difficult to understand that most of the capital ended up in ten-year T bonds, which this morning, despite a slight rebound from the lows, are still trading well below two-year bonds, as happened in 2007, on the eve of the recession. The bond rally, however, promises to be a panacea for the Italian Treasury and for the banks of the Bel Paese, the happiest note for the global economy. The strong rebound in prices is an important assist for the revitalization of the Italian economy, a surprise opportunity that is already reawakening the interest of the big investment houses in our country's blue chips. Woe to waste this chance. Meanwhile, the financial week is approaching a positive conclusion. In the skies of the trade war the air is looming for an imminent resumption of dialogue between the Greats. But on Sunday the new US tariffs against Chinese goods will take effect.
HONG KONG, PROTEST LEADER ARRESTED, FLY TO SEUL
Asian price lists are up this morning. The race is led by the Nikkei of Tokyo (+1,2%), ahead of Hong Kong (+0,6%). But during the night the police arrested one of the leaders of the protest against Beijing.
Chinese stocks go up. The CSI 300 index of Shanghai and Shenzhen stocks rose by 0,3%. Up also Sydney (+1,4%). The Kospi of the Seoul Stock Exchange gains 1,8%: the Central Bank of South Korea confirmed rates at current levels and industrial production beat expectations in July (+0,6% against -3% expected ), it won't be appreciated.
The yuan remains close to the lows, at 7,15 against the dollar. In August, Beijing's currency retreated by 3,7% against the US one, the most marked decline in a quarter of a century.
A spokesman for the Beijing Ministry of Commerce said yesterday that the meeting between the delegations will be scheduled in Washington for September. The same, he put aside the possibility that China intends to respond in kind to the latest increases in tariffs announced on Friday by Donald Trump.
WALL STREET REDUCES AUGUST LOSSES
Signs of easing of tension favored the recovery of the American markets: Dow Jones +1,25%, S&P 500 +1,27%. The Nasdaq rallied 1,48%. Despite these increases, the month of August closed in the red, as has not happened since May.
The effects of the import/export crisis are felt: Abercrombie & Fitch collapses (-15%), Best Buy suffers (-8%).
BUENOS AIRES ON THE VERGE OF DEFAULT
Argentina's crisis explodes again: the Argentine peso plunges by 3%, the stock market drops 4,5% and country risk soars to levels not seen since 2005, after the government announced plans to lengthen the deadline about $100 billion of its debt.
Gold is trading on Asian financial markets at 1.525 dollars an ounce, down 0,2%.
Brent oil moved slightly, at 61,2 dollars a barrel, after three consecutive days of increases. At Piazza Affari Tenaris -1%, Saipem +1%, Eni +1,7%.
The euro weakens for the fifth consecutive day, to 1,104 against the dollar, ahead of the release of inflation data in the euro area in August, expectations are for a 1% increase from +1,1% in July , but the slowdown could be more abrupt, in light of what was recorded in Germany in the same month, a sharper than expected slowdown in consumer prices.
GERMANY SUPPORTS THE CONTE GOVERNMENT
The formation of a new Italian coalition government is good news for Europe and Berlin looks favorably on a "stable and progressive" executive. The German Finance Minister, Olav Scholz, did not hide his satisfaction with the welcome and surprising turnaround in the Italian crisis, greeted by the markets with a sensational rally in debt securities. Such enthusiasm, of course, must not be disappointed either by the new executive or by the attitude of the Community.
But Christine Lagarde has thought of instilling new optimism in the markets, who will take the place of Mario Draghi from XNUMX November. “The ECB has a rich toolbox at its disposal and it must be ready to act,” she argued in a document written to answer questions from the European Parliament's economic affairs committee. The new president of the Frankfurt institute said she was in favor of the launch of Eurobonds, which "could favor a more efficient management of monetary policy".
In the late afternoon, the European markets slowed down, held back by the no to another QE arrived by Klass Knot, governor of the Dutch central bank who has long been in positions distant from those of Mario Draghi. Knot said the market is overcharging itself with expectations for new monetary stimulus.
MARKET PLACE STILL AT THE TOP, LONDON RISES IN FLAMES
Piazza Affari also led the race of the European markets yesterday. The index (+1,98%) rose to 21.336 basis points. The other markets were also positive: Frankfurt rose by 1,2%; Paris +1,5%; Madrid +0,6%.
London is also advancing, up by one percentage point. The pound remains stable against the euro after yesterday's decline. Conservatives critical of Brexit are preparing to ally against Boris Johnson ahead of a last minute vote in Parliament.
THE 10-YEAR RETURNS LESS THAN 1%, SPREAD TO 167
Yield of the BTP hit a low of 0,91% yesterday, a new record; it is now at 0,95%.
The new 4-year contract was awarded at auction for 0,96 billion euros at a gross rate of XNUMX%.
The Italy-Germany spread narrows to 167 basis points, from 174 yesterday. A low was hit at 162 during the day.
The yield on the Bund rises to -0,69% (+3 basis points).
In Germany, inflation harmonized with EU practices slows down in August to +1% from +1,1% in July. The consensus was expecting +1,2% year on year.
BANKS ARE RUNNING: MPS WITH TURBO
Under the push of the drop in the spread, banking stocks shine together with Poste Italiane (+4,7%) on the wave of the revaluation of the stock of BTPs purchased in recent months. Lively Azimuth (+3,1%).
The credit index is at a four-year high. Monte Paschi takes flight: +13% in the belief that the new government is more inclined to find market solutions.
PRYSMIAN, LEONARDO, CNH: BROKER ON THE ATTACK
The attention of the brokers has favored the awakening of some blue chips. Prysmian is up (+4,6%) after Goldman Sachs promoted the stock to 'buy' from 'neutral', improving the target price to 22,5 from 17,5 euros.
Leonardo +4,2% driven by the recent Morgan Stanley report.
Cnh + 5,2% in anticipation of Tuesday's Capital Market Day.
The rally of Tim (+2,4%) and of the utilities continues: Italgas +2,7%, Enel +1,7%, Hera +1%.
Conversely, Pirelli suffers, -2,2% after the Citi sell.
The luxury stocks moved little. Brunello Cucinelli falls, -1,8% after the accounts.
MEDIASET: THE JUDGE POSTPONES THE DECISION
Mediaset -1,29%. The judge of the court of Milan has reserved the right to decide on Vivendi's request to be able to exercise the right to vote at the extraordinary shareholders' meeting of Mediaset on 4 September, which will have on the table the merger of the activities in Spain and Italy, the move to Holland and the consequent governance review.
