The Bank of Japan does not change course. Rates remain below zero (-0,1%, zero yield for 80-year bonds) and the purchase of bonds worth 2 trillion yen a year will continue. So decided the Bank of Japan, while recognizing that consumption, investment and profits are growing. But the board of the Central Bank has lowered inflation estimates again: from 0,5% set in January to 1-XNUMX%.
Thus ended the week of the central banks, marked by the increase in US rates but, above all, by the decisions of the European Central Bank. Mario Draghi has announced that Qe will end at the end of 2018 (the weapon could be reactivated in the event of a worsening of the economy) but added that, unanimously, it was decided that rates will not rise until the summer of 2019 or beyond. It may not be him, due in October 2019, to raise interest rates.
At that time, if the Fed respects the roadmap, US rates will have recorded five hikes (two expected for the rest of 2018, three for 2019) confirming the growing gap between the most important economic areas on the planet.
THE DOLLAR OVERWARDS WEAK CURRENCIES: ARGENTINA KO
The week thus draws to a close with a dollar in appreciation on all counterparties. The Bloomberg index on the dollar has achieved a rise of 4% in the last 3,4 days, one of the largest weekly variations in recent years. A breath of fresh air for the European Union, which is slowing down, but an additional problem for the economies most indebted to the US currency, such as Argentina, whose currency, despite the help of the Monetary Fund, is in free fall. Tonight the president of the central bank Federico Sturznegger resigned, his place was taken by Luis Caputo, former finance minister.
FROM TRUMP 50 BILLION DUTIES FOR CHINA
In this context, the price lists are heading towards the weekend. The Tokyo Stock Exchange falls by 0,3%, while the yen weakens against the dollar. The Hong Kong Stock Exchange fell by 0,1%, while the CSI 300 index of the Shanghai and Shenzhen stock exchanges lost 0,6%.
The duties on a long list of Chinese goods entering the United States, threatened by Trump in April, are about to arrive: the Financial Times writes that the document is on the president's desk. The equivalent value of the provision is approximately 50 billion dollars.
Reuters instead anticipates that Mexico is preparing to impose a 4 billion dollar tax on soybeans imported from the United States.
The euro is stable at 1,157 against the dollar after the significant decline (from -1,9%) yesterday.
The Draghi effect has also been felt on Wall Street. The S&P 500 index is up 0,25% from initial losses. Nasdaq +0,81%, down only the Dow Jones (-0,1%).
Twenty-First Century Fox is still up (+2,1%) after the confirmation of the offer of 65 billion dollars by Comcast, 20% higher than that of Walt Disney.
Oil moved little, waiting for the next increase in production: the OPEC summit should sanction the decision taken by Saudi Arabia and Russia, yesterday protagonists of the first meeting of the World Cup, which closed with the goal of the Russian team (5-0).
Brent traded this morning at 75,87 dollars a barrel (-0,1%), the American Wti at 66,93. At Piazza Affari Saipem +2,75%, Eni almost +2%.
THE USUAL AMAZING DRAGONS
The ECB meeting did not disappoint expectations. On the contrary. "Mario Draghi - writes Antonio Cesarano of Intermonte - managed to surprise operators and analysts again not so much for the extension of the QE, the announcement of which was also possible in the July meeting, but rather for the ability to obtain with a unanimous vote (therefore Germans and French included) the commitment to keep interest rates unchanged at least until the summer of 2019 or beyond if necessary”.
In summary, the Governing Council has resolved that Quantitative Easing be halved from 30 to 15 billion per month from September to the end of the year. Purchases will be canceled from 2019 January XNUMX.
After the end of QE, the ECB will continue to reinvest the principal of purchased bonds that mature long after the end of net purchases.
The reference rates The reference rates (therefore also including that on deposits currently at -0,40%) will be kept at their current level at least until the summer of 2019 and in any case until it is necessary to ensure an adequate adjustment of the 'inflation.
To arrive at this result, reports Reuters, the members of the ECB directorate discussed at length.
BAGS: MILAN FLYS, BUT THE BEST IS BUDAPEST
Two-sided session for the European markets: weak before the announcements of the ECB while the euro climbed well above the threshold of 1.18 against the dollar; effervescent in the afternoon after Mario Draghi's press conference. The European closures thus recorded good gains on equities against the fall of the euro, a generalized decline in yields, and stable spreads on bonds.
Milan closed up 1,22% at 22.486 points. The Ftse Mib index which had come to lose 1% in the morning on the wave of Fitch's judgment which lowered the estimates of Italian economic growth, for 2018, from 1,5 to 1,3%.
Mario Draghi, referring to Italy, wanted to defuse the situation, emphasizing that there was no contagion effect on the rest of the Eurozone. "We have not seen any risk of renaming", added Draghi, underlining that in any case the ECB can count on safeguards against this scenario. But he also wanted to reiterate that "the euro is irreversible".
The most euphoric price lists were Frankfurt (+1,68%) and Paris (+1,39%); warmer Madrid (+0,59%). Outside the eurozone, London (+0,83%) and Zurich (+0,68%) rose.
But the Draghi effect this time affected all the lists of the Old Continent a bit: the best stock exchange was that of Budapest (+2,2%). Athens is also in evidence (+1,2%).
LOWER THE SPREAD. THE TREASURY COVERS 56% OF THE 2018 NEED
Good news also from the Btp-Bund spread, which fell to 230, on the day's lows. The Italian ten-year rate fell to 2,75% after the response of the ECB meeting.
The two-year yield returned below 1%, retreating by more than 20 basis points from the highs of the morning.
In the afternoon, the Treasury placed around 650 million Btp in the reopening of the four bonds at auction yesterday. The requests were concentrated on 3 and 7 year loans while there were practically no requests for extra long maturities ( 2048).
With the mid-June auction round definitively closed, the refinancing needs of the Treasury for 2018 (between 390 and 400 billion) are covered by almost 56%.
PRYSMIAN, FERRARI, STM: THE TRIC OF THE BULL
The sprint of some industrialists dominated the Piazza Affari scene.
The best blue chip was Prysmian (+5,76%) with above-average volumes. The market liked the interview with President Valerio Battista with Il Sole. “We estimated 150 million synergies in three years. The target will be to reach over one billion euros in EBITDA over the course of 2-3 years” underlined the manager. The acquisition of General Cable has raised the net financial debt to 3,2 billion, which after the capital increase will fall below 3 billion. "We have to work to reduce it and that's priority number one."
The automotive industry did well under the impetus of Ferrari: +3,7% to 127,2 euros, a new record. Berenberg's analysts raised the target price to 135 euros from the previous 125 euros, confirming the Buy judgment.
Fiat Chrysler +2,2%.
Stm's race continues: +2,07% to 22,68 euros. The stock trades at its highest since 2004. The stock is boosted by the positive sentiment on the technology sector: Eurostoxx Technology at its highest since 2001.
UNICREDIT, THE WORST BLUE CHIP
The banking sector did not participate in the party: the postponement of the rate hike reduces the profit prospects for credit. The Italian index closed down by 0,4% against the +0,8% of the European Stoxx. Unicredit (-1,2%) was the worst blue chip together with Mediobanca (-1%).
POSTE, SOON THE CHOICE OF THE PARTNER FOR THE AUTO TPL
Poste Italiane is still in great evidence (+2,36%). After the agreement with Amazon, analysts' attention was focused on the choice of insurance partner for the landing in motor liability, a new stage in the diversification of services. with an insurance company.
Italgas is in positive territory (+0,6% to 4,82 euros) after the declines following the announcement of the plan to 2024. The share reacted after a negative start that had pushed the price up to 4,6680 euros. Banca Imi strengthened the Buy, readjusting the target to 5,80 euros from 5,70 euros. Mediobanca raised the target price to 5,20 euro from 4,90 euro, confirming the Neutral rating.
In the rest of the list, a 7,8% leap for Mondadori: “Panorama”, writes il Fatto, could be sold to the Angeluccis.
