"There is so much confusion under the sky: the situation is excellent". This was Chairman Mao's opinion, but not so the markets, disoriented by the absence of geopolitical and monetary certainties. A scoop from the Financial Times informs us this morning that the European Central Bank last month decided to restart quantitative easing, the extraordinary program of asset purchases, ignoring the objections of its own officials: the move has reopened the divisions in the institution.
Meanwhile, the minutes of the last meeting of 17 and 18 September, in which the Federal Reserve cut interest rates to 1,75-2%, show that the risks for the US economy "have increased compared to July". There is also talk of "greater trade uncertainty, weaker economic growth prospects and intensified geopolitical risks".
NEAR AGREEMENT BETWEEN CURRENCIES, NOT ON TECHNOLOGY
The uncertainty is fueled by the conflicting news on the tariff negotiations, a few hours after the meeting between the US and Chinese delegations. Optimism is fueled by the impression that Beijing intends to offer an increase in purchases of agricultural goods, in exchange for the cancellation of at least the threatened tariffs, including those of October 15 and December 15. But the South China Morning Post anticipates that the Chinese team will leave the US tonight in response to the new blacklist imposed against Chinese hi-tech companies, a hypothesis however denied by the Global Times, a newspaper very close to Beijing's top leaders.
However, optimism seems to prevail on Asian price lists this morning.
Tokyo's Nikkei rises (+0,3%). Hong Kong's Hang Seng +0,3%, Shanghai and Shenzhen CSI 300 +0,4%. Only the South Korean Stock Exchange loses 1%.
Bloomberg reported that the United States and China would be very close to agreeing on a real pact on the exchange of currencies, while the New York Times wrote that the White House will soon grant special permits to some US companies supplying technology and Huawei.
The dollar-yuan exchange rate fell to the lows of the last two weeks at 7,11. The Japanese yen weakens. Gold holds the positions, at 1.509 dollars an ounce.
Last night on Wall Street the Dow Jones gained 0,70%, climbing back to 26.346 points. The S&P500 closed up 0,9%, returning to 2.919 points. NASDAQ +1,02%.
The best stock was Microsoft. On the eve of the start of the earnings campaign, signs of caution are multiplying: the stocks of the S&P basket will record a drop in profits of around 3%, something that won't happen in three years' time.
OIL ON THE ROLLER COAST, THEN IT CALMS DOWN
Brent oil has moved quite a lot in the last few hours, first up and then down. The worsening of the Kurdish crisis weighs, but also the publication of data on inventories and production, but this morning it moved little at 58,2 dollars, yesterday evening it closed slightly higher.
MUSTIER: NEGATIVE INTEREST ON HIGHER DEPOSIT
Futures on European stock exchanges anticipate a slightly progressive start. The divisions that emerged in the ECB's directorate are holding court in Europe, pending the minutes of the last meeting in which Mario Draghi, backed by the majority of his colleagues, decided to restart QE, despite the no from the bank's Internal Committee as well as from the central bankers, including France and Germany. It wasn't the only time the banker didn't follow the Committee's instructions: it happened four times in eight years, but it is certainly another indication of the pressure that the hawks are ready to exert on Christine Lagarde. But the unease also emerges in Jean-Paul Mustier's decision to impose negative yields on deposits over 100 euros.
BREXIT, A NEW POSTPONEMENT IS LOOKING FORWARD
The probable postponement of the breakup contributed to bringing some relief on the Brexit front, even if Boris Johnson insists on the date of October 31 ". "Boris Johnson - comments Giuseppe Sersale of Anthilia - is looking for any expedient to obtain the exit on October 31st, and therefore, although extension and new elections remain the central scenario, it cannot be ruled out a priori that he will succeed".
BUSINESS PLACE +0,6%, ALL CRAZY ABOUT THE DOLLAR BTP
In this context, Piazza Affari found its way up again after just one negative session: + 0,6%, to 21.533 points.
Frankfurt is usually the most ready to respond to the decrease in tensions on tariffs: +1,04%; followed by Paris (+0,78%) and Madrid (+0,55%).
London is also on positive ground (+0,36%). According to the European negotiator for Brexit Michel Barnier reaching an agreement for the exit of Great Britain from the European Union before October 31 will be "very difficult". “Boris Johnson - comments Giuseppe Sersale of Anthilia - is looking for any expedient to obtain the exit on October 31st, and therefore, although extension and new elections remain the central scenario, it cannot be excluded a priori that he will succeed”.
The return of Italian Treasury issues in dollars has already proved to be a great success. The three tranches collected a total of offers of 20,7 billion dollars: 9,5 billion dollars for the 5-year, 6,3 billion for the 10-year and 4,9 billion for the 30-year.
Given the amount of bookings, "I think they will issue at least a billion dollars per tranche," says an operator of the bond market of an Italian SIM. The strength of the demand prompted the Treasury to correct the initial indications on the spread downwards. With the book closed, the five-year is given at 105 basis points above the reference level (mid swap), the ten-year at 150 basis points on the mid swap and the thirty-year at 235 basis points.
The BTP is also available on the retail channel, but most of the orders should have come from institutions, as the minimum denomination, equal to 200.000 dollars, keeps low and medium-level savers away.
Dollar issuance dominated the scene on the bond markets. On the secondary side, the yield on the ten-year BTP rises to +0,86%, but the spread with the Bund falls to 141 basis points (-1,61%) due to the rise in the yield of the latter, from -0,6% to -0,55%.
GREEK BOTS EVEN IN NEGATIVE SOIL SHORTLY
Peripheral European bond yields are still declining.
Portugal placed 750 million euros in 15-year bonds at a historic low rate of 0,49%.
For its part, Greece placed 487,5 million in 3-month bonds at negative rates for the first time in history.
Day of glory yesterday for Tim (+3,1%). The company could list the assets of the data centers, estimated at around one billion euros, on the stock exchange.
TIM ON THE SHIELD, OF THE OLD MANEUVER ON MEDIOBANCA
Bank stocks up slightly. The markets are preparing for Leonardo Del Vecchio's offensive in Mediobanca +0,16% at the shareholders' meeting on 28 October. The king of eyewear, 7% strong (but aiming for at least 10%, subject to authorization from the ECB) said yesterday that he "expects an industrial plan that is based not only on the results of Generali and Compass but projects a future as an investment bank ”.
Monte Paschi -1,4% despite the return to talk of the possible spin-off of 10 billion in doubtful loans.
Intesa Sanpaolo +0,8%. Unicredit -0,3%.
Nexi +1,41% thanks to the increase in the final. Prepare issues of 825 million with a 2024 and/or 2027 maturity; an attractive yield could have a positive impact on EPS, says a trader.
MONCLER BOUNCES, D'AMICO SHINES
Atlantia +2% pending possible entry into Alitalia which could improve relations with the government.
Among industrialists, Prysmian shines (+2,1%) among the best in the industrial sector, recovering after the drop on the eve.
The car sector is recovering: Fiat Chrysler +0,5%, Pirelli +1,5%. Brembo also advances (+2,2%) in road shows with Equita.
Luxury hit by the Hong Kong effect is revived.
Moncler rebounds by 2% to 33,2 euros in the final and brings the earnings since the beginning of the year to +14%, compared to +18% of the FtseMib. In July it had come to earn +43%.
Salvatore Ferragamo rebounds by 1% to 16,15 euros, but the balance since the beginning of the year is -8,5%. The quotation fluctuates on the lows of the last seven years.
The exception is Brunello Cucinelli, down by -1,6% to 26,86 euros on a day of generalized recovery in the sector. The quotation slips to the lowest since the end of 2018.
Mondadori rises by 5,3%.
D'Amico leaps to double figures (+13,73%): Kepler Cheuvreux has confirmed the buy recommendation on the stock.
