The shadow of tariffs on China, the risk of a currency storm on Argentina and Turkey, the Fitch effect on the Italian Stock Exchange. Several negative factors prevent the markets from taking advantage of the closure of Wall Street today, today on holiday for the Labor Day holiday. And so Asian stock markets opened the week in negative ground, starting with China (Shanghai -0,9%, down 5,3% in the last month) and from Tokyo (-0,5%).
CHINESE MANUFACTURE AT A 14-MONTH LOW
The mood of the Chinese Stock Exchange is conditioned by this morning's data on economic trends: manufacturing activity in August fell to its lowest level in 14 months, also due to a significant slowdown in exports. Xi Jingping's call, who on Sunday reaffirmed his willingness to accelerate economic reforms and defend free trade, had no effect: the markets are convinced that Trump will proceed tomorrow with the increase in tariffs on Chinese imports.
SOS IN BUENOS AIRES: FRANKLYN TEMPLETON LOSES 1,2 BILLION
Meanwhile, the tensions on emerging currencies are pushing up the safe haven currencies, first of all the Swiss franc, to a one-year high against the euro (1,1240). Last week the Argentine peso lost 20% of its value (-38% in August) despite the rate hike up to 60%. Tomorrow Christine Lagarde will meet the Argentine president Mauricio Macri: during the week the Monetary Fund will have to decide whether to advance the 50 billion dollar loan requested last May.
Meanwhile, the Argentine crisis has caused its first victims: Franklyn Templeton, one of the most prestigious houses specialized in emerging markets, has suffered losses of 1,23 billion dollars on Buenos Aires securities in the last two weeks, dragging them down by 4,3% its Global Fund, well distributed also in Italy. Thus the fear of a crisis in the securities of the entire sector takes shape. Meanwhile, target practice continues on the Turkish lira (-1% compared to Friday) and on the Indonesian rupiah, at their lowest for twenty years.
Oil also stops: 77,35 dollars a barrel in the Brent version, despite the cuts in imports from Iran and the new interruptions in Libya. However, the production of US shale oil is growing.
THE GOVERNMENT THE RATING. THE STOCK GETTING READY FOR THE STORM
In this setting, Piazza Affari is preparing to experience another week of high tension. We start again from the verdict of Fitch, the first of the rating agencies to pronounce on Italian debt (ratings confirmed at Bbb, but outlook downgraded to negative) and from the prices marked by Treasury bonds both at auction and on the secondary market, where the ten-year BTP it jumped over 3% and the 2-year bond recorded a differential of more than 200 points against its German counterpart. A high-risk situation, on the eve of the season of choices: in fact, the construction site of the Budget law is coming to life, amidst political pressure to implement electoral promises and invitations from Europe to respect the parameters.
Piazza Affari has already shown that it does not share the quiet optimism of Economy Minister Giovanni Tria, but, on the contrary, the concerns of Carlo Cottarelli who has already measured the first effects of the promises of the yellow-green majority. The forays of Matteo Salvini ("we'll be close to the 3% deficit") and Luigi di Maio ("first the Italians, then the rating agencies") do not help.
ONLY WORSE THAN ARGENTINA, Türkiye AND BRAZIL
In the month of August, the Italian Stock Exchange lost 9%. Only the stock exchanges of Argentina (-30%), Turkey (-28%) and Brazil (-11%) did worse than us. Above all, banks are targeted: the values of Italian institutions, notes the Financial Times, have slipped to just over 0,6 times the book value.
FCA, MANLEY'S CONFIRMATION ON FRIDAY
The financial crisis risks overshadowing other important events in Piazza Affari. On Friday 7th, Fiat Chrysler and Ferrari will be in the limelight. The assemblies will have to confirm the appointments after Marchionne: Mike Manley in FCA, Lou Camilleri in the Reds. The day before the meeting of Exor will be held.
TODAY ON THE CALENDAR: EUROPEAN PMI, OECD OUTLOOK
The performance of the main European manufacturers, including Italy, will be examined by the markets today.
The most important data of the week, the one on the US labor market, will be released on Friday. Growth of 225 jobs is expected: the time for the third US rate hike of 2018 is approaching.
To follow today the publication of the OECD Outlook. The member of the ECB directorate Yves Mersch took part in the presentation. Jens Weidmann is also expected to speak.
On the subject of central banks, the governor of the Bank of Japan Haruhiko Kuroda also takes the field today. Tomorrow Mark Carney, number one of the Bank of England, will respond in Parliament on the subject of inflation. It could be an opportunity to announce his willingness to stay at Moe for a new mandate.
