The financial week is off to a great start, boosted by Joe Biden's electoral victory. Stocks rise, the yuan takes off, oil grows. It is the effect produced by the victory of the Democratic candidate, which puts an end to the uncertainty regarding the US vote. The Nasdaq anticipates a spectacular debut: futures on the US stock market are up 2,5%.
Chinese price lists are celebrating, awaiting the departure of Single's Day, the bachelor party that Alibaba has transformed into the largest online discount fair. The Csi 300 index of Shanghai and Shenzhen rose by 1,7%, Hong Kong by 1,4%. Purchase volumes, especially in the high-tech companies sector, are on the rise, and there is a growing fear of not being able to buy shares. Shenzen's ChiNext index gains 3,5%, Hong Kong's HSTech 4,5%.
NIKKEI INDEX UPDATE HIGHEST SINCE 1991 TOKYO
The yuan is also flying, at 6,5858 against the dollar (+5,7% in 12 months). China's macroeconomic data released today helps keep morale high. In October, exports rose by 7,6%, down on September, but better than the +6,5% expected by the consensus.
The euphoria continues in Japan too, after the Nikkei index set a new high since 1991 on Friday. The stock market advanced by 2,1% this morning despite the revaluation of the yen, one step away from a hundred against the dollar. There is eager anticipation for the accounts of Softbank, the giant protagonist of last summer's raids on the stock exchange: with a series of successful acquisitions (and the sale of the English group Arm) the accounts seem to be back in order.
But the euphoria is infecting all of Asia, recovered (with the exception of India) from the contagion: the accounts of Foxconn, Apple's main supplier, are expected this week. Seoul's Kospi +1,5%, Sydney's S&P ASX 200 +1,7%.
ILO, LIBYA RETURNS AT RECORD RACE
Brent oil gains 2,4%, to 40,4 dollars a barrel. Libya has already exceeded one million barrels a day of production, about 5 times what it was pumping at the end of the summer. The twelfth hurricane of the season is approaching the Gulf of Mexico. In the next few hours, what is currently a tropical storm should hit Florida.
Gold at 1.964 dollars an ounce, +0,5%, from +3,8% last week.
HEALTHCARE AND RECESSION, THE FIRST CHALLENGES OF THE PRESIDENT
Joe Biden does not intend to waste time. In the first 48 hours after the electoral affirmation, the new president announced his intention to bring the United States back into the climate treaty and the World Health Organization immediately after taking office in the White House. And he won't miss a speech on dreamers, “erased” by the Trump administration. However, the first decision will be the establishment of a federal task force to deal with Covid-19, in open discontinuity with the policy followed by Donald Trump.
But Biden is expected to face the health and economic emergency, which he will have to face with limited means because it is obvious that the Senate will only give the green light to a more contained package of fiscal measures than hoped for.
SINISCALCO: THE RECOVERY ON THE SHOULDERS OF THE FED
This isn't necessarily bad news, ex-treasury minister Domenico Siniscalco explained this morning in Repubblica: "The Federal Reserve will support the recovery: this will keep interest rates and the dollar at low levels, with stock markets as the main use of wealth, and therefore at high levels. These trends could be further accentuated by the European Central Bank's new purchasing programme. A scenario that pleases the markets and does not require a change in the portfolios and risk positions of investors".
THE EU FACING BREXIT AND THE TURKISH CRISIS
Today the summit of EU foreign ministers will have the opportunity to analyze the consequences for Brussels of the effects of the defeat of the sovereignists on the Brexit negotiations. Meanwhile, another hotbed of crisis on the borders of the EU is getting worse. The Turkish lira rebounds after a chaotic weekend. Finance Minister Berat Albayrak, son-in-law of President Recep Tayyip Erdogan, also resigned. A decision came two days after the dismissal of the president of the Turkish Central Bank, Murat Uysal, replaced after just 16 months by Naci Agbal. Albayrak is paying for the collapse of the Turkish lira, for which he was supposed to guarantee a recovery, but which has lost 40% of its value in the last year, while annual inflation has risen to 11,89%.
On Thursday, the evolution of the pandemic and the responses to the recession will be the focus of the annual meeting of the ECB on Thursday. The "Forum on Central Banking" will be attended by Christine Lagarde, the governor of the Bank of England Andrew Bailey and the number one of the Fed Jerome Powell.
THE FUTURA OFFER IS LAUNCHING TODAY
After the confirmation of the Italy rating by Moody's (baa3, outlook stable) the Treasury launches this morning the second tranche of the BTP Futura, the government bond aimed at raising anti-Covid resources which will be on sale from until 13 November, unless the placement is closed early. The remuneration of the coupons is confirmed as they progress as time goes by: a minimum level of 0,35% from the first to the third year, 0,6% from the fourth to the sixth and 1% for the last two years. Unlike the July issue, which had raised 6 billion, the bond will have a maturity of 8 years (against the previous 10).
Among the macroeconomic data, expectation for the data on industrial production in September, which could provide an initial indication of the slowdown of the economy after the summer flare-up, with the Confindustria study center which has already estimated a -3,2%.
More economic data will arrive in the morning:
- The German Zew Index (Tuesday)
- UK GDP (Friday)
- The ECB's monthly report on the Eurozone
- The mid-month Bot auction will be held on Wednesday, the day after it will be the turn of the medium-long term offer.
TODAY THE ACCOUNTS OF FINECO AND BREMBO
The number of quarterly reports is still strong. We start today with the accounts of FinecoBank, Brembo, Cementir and RCS. Followed by Tim and Terna (Wednesday), Generali (Thursday) and Atlantia (Friday).
The US bond market will be closed on Wednesday for the anniversary of Veterans Day. Also on Wednesday, China will stop for Single Day, the day of Alibaba's discounted offers.
The accounts of Walt Disney and Mc Donald's arrive in the USA.
