The Asian stock exchanges moved little while waiting for Wall Street to reopen its doors, the real engine of world finance. In the absence of the benchmark from the US Stock Exchanges, the brief rally on the Tokyo Stock Exchange (-1,2%) has already ended, despite the modest recovery of the dollar against the yen (106,720) and against the euro (1,2388). Negative opening of the "year of the dog" in Hong Kong (-0,2%), the only price list in the Chinese area that has already reopened after the Lunar New Year. Seoul's Kospi index closed down 1,1% while Mumbai's BSE Sensex index rose 0,2%.
Oil rose due to the increase in tension in the Middle East. WTI crude traded this morning at 62,16 dollars a barrel.
DE GUINDOS NEW DEPUTY IN BCE. ONE POINT FOR WEIDMANN
Even Europe, down yesterday, suffered from the absence of the US compass. In Brussels, as expected, the first piece of the mosaic of the new ECB leaders fell into place: the new deputy of Draghi will be the Spaniard Luis de Guindos, a great protagonist as Finance Minister of the recovery of the Spanish economy.
Now the choice of a candidate from Northern Europe (see Jens Weidmann) to succeed Mario Draghi is becoming more probable. This too favored the rise of tensions on the bond markets. With the exception of Greece (promoted by Fitch), a large part of European government bonds weakened. The yield of the Bund rose by three points to 0,73%, that of the ten-year BTP to 2,05% yield, from 1,98% at Friday's closing.
BTP, JP MORGAN: AFTER THE VOTE SPREAD FROM 100 TO 300 BP
At current levels, 2,03% yield and 130% spread with the Bund, the ten-year BTP is priced correctly. The judgment is from JP Morgan, therefore the uncertainties on the outcome of the March 4 elections are already reflected in the prices. The investment bank gives a third probability to a centre-right government, a third probability to a centre-left, a quarter probability to a minority government and a 9% probability to a majority formed by anti-system parties.
In the event of the formation of a large coalition between centrist forces, the spread could fall below 100 basis points, it should fluctuate around 140 basis points if a centre-right government were to take office. A Parliament dominated by anti-system forces would bring the spread to 300 basis points. In case of new elections, JP Morgan sees a spread of 200 basis points.
MAXI-OFFER OF THE US TREASURY: 258 BILLION AT AUCTION
Today the agenda of the mandatory markets is much more demanding. A robust offer of government bonds is triggered in the US. The US Treasury is auctioning $52 billion of three-month bonds and $45 billion of six-month bonds. It will continue in the following days with other large auctions, on longer maturities. Overall, this week, paper for 258 billion dollars arrives from the United States. The absorption of demand has been taken for granted, but the focus is on the return that will have to be paid to investors: the highest rates for at least five years are expected.
In Europe, the German Zew index and the European consumer confidence index will be published. A slightly higher opening is expected for the lists of the Old Continent.
SOROS MAXI-ADVERTISEMENT AGAINST BREXIT
On the front of the relationship between politics and finance, George Soros' latest campaign deserves attention. The tycoon announced massive financial aid to the anti-Brexit campaign which will precede the vote in the Municipalities, expected in six weeks, on maintaining the customs union with the European Union. The move will spark an intense publicity campaign in the Midlands, the area where Brexit has garnered the greatest support.
MILAN -1%, THE WORST STOCK EXCHANGE YESTERDAY
Piazza Affari was the weakest price list. After a promising start (Ftse Mib index at 22.863 points) the first session of the week recorded a deadweight loss of one percentage point at 22.569. The other markets were also weak: Frankfurt dropped 0,53%, Paris 0,48% and London 0,64%.
In 2017 the debt/GDP ratio fell by "about half a percentage point" according to the Deputy Director General of the Bank of Italy, Fabio Panetta. “We must seize the opportunity offered by the recovery to reduce debt with increasing determination. Progress on this front and on structural reforms will help reduce the persistent growth gap with respect to the EU average,” Panetta said speaking at a Bank of America Merrill Lynch conference in London. The Treasury has estimated debt down to 131,6% from 132% in 2016. The exposure of Italian banks to BTPs and other Italian government bonds, added Panetta, decreased by 120 billion compared to the peak reached in 2015.
FIRST PRE-ELECTION TENSIONS ON ITALIAN STOCKS
Nine sessions from the date of the elections, BTPs were the most penalized securities in the periphery, together with Spanish paper, held back by the news of the assignment by the Spanish Treasury to a pool of banks to coordinate the launch of a new thirty-year government bond expiring on 31 October 2048.
In closing, the yield gap between the BTP and the Bund on the 132-year stretch is worth 129 basis points from 2,05 at last Friday's close, while the 1,99-year reference rate trades at XNUMX% from XNUMX% on Friday. The two-year period was less choppy with a consequent steepening of the yield curve.
FLY TENARIS THANKS TO TRUMP DUTIES
The only outburst of Piazza Affari involved Tenaris (+3%) supported by the recommendation of the US Department of Commerce on the limits on steel and aluminum imports from Asian countries. "The possible imposition of duties and/or quotas on imports into the USA could improve the scenario on pipe prices in the USA for the company controlled by the Rocca group", comments Equita Sim who recalls how the USA represents 30% of turnover .
Eni unchanged. Credit Suisse adjusted its target price to 15,50 euros from 15,25 euros, leaving the Neutral recommendation unchanged.
BPM SHINES, CARIGE PICKS UP
Among the banks, Banco Bpm stands out (+0,8%) after the ECB's authorization to review Banco's internal models in favor of Bpm with a benefit on Cet1 estimated at around 80 basis points. Closing in the red for Unicredit (-1,78%) despite the increase in the target price from 16 to 18,5 euros by Berenberg.
Day of movements in the world of credit. Carige leaps by 8,2% after the news of the purchase of a 5,4% stake by Capital Investment Trust headed by Raffaele Mincione. The Creval share lost 7,13% to 0,104 euro and the rights 66,8% to 2,55 euro on the first day of the hyperdilutive capital increase of 700 million. Little move Poste Italiane (-0,15%) that it published the 2017 results on closed markets: consolidated net profit amounted to 689 million (+10,8%).
CAMPARI PROMOTED BY BERENBERG
To be noted in contrast to the main Campari list +0,56% inserted among the few top picks of Berenberg in the spirits sector. The broker conducted a study on the consumption of alcoholic beverages in the USA, interviewing 16 to 22 year olds, from which a declining consumption trend emerged.
Telecom Italia was also positive +0,26%: from Raiway (-0,95%), together with F2i, came the only binding offer for the purchase of Persidera, the multiplex company 70% controlled by the company led by Genish and 30% by the Gedi group (-0,99%).
NO DAY FOR THE CAR. DAIMLER PUNISHED
Automotive sales throughout Europe. Daimler, at the center of an investigation into diesel engines in the USA, leaves 1,98% on the ground. Volkswagen -0,85%. Ferrari and Cnh Industrial end up at the bottom of the Italian list, down by more than 2%, while FCA loses 1,85%.
Cad.it rose by approximately 7,35% to 5,26 euros, just below the price of the takeover bid aimed at the delisting at 5,3 euros per share.
Safilo is up 3,09% after the changing of the guard at the top of the group. Leave Luisa Delgado, in his place comes from Unilever Andrea Trocchia. According to Equita Sim, the new CEO will have to face a complex situation, given the weakening of the brand portfolio and the group's competitive positioning. The presentation of the new business plan, initially scheduled for 14 March, is postponed to the second part of the year.
Fincantieri -0,81%. the US subsidiary Marinette Marine, has obtained a contract worth 15 million dollars to develop the study of a version of its Fremm project for the new multi-role frigates of the future generation.
