The financial week begins on a positive note: the Asian stock exchanges rise and futures anticipate a start with a plus sign also for the western markets. Supporting the Bull are the expectation of "dovish" signals from the Fed, which are pushing bond prices downwards, and the official start of merger talks between Deutsche Bank and Commerzbank confirmed yesterday by the two councils.
FURURES REPORT RATES DOWN, BONDS RUNNING
Shanghai (+1,7%) rose sharply ahead of Tokyo (+0,6%) and the markets of the Far East. The Seoul Kospi rises (+0,1%). BSE Sensex of Mumbai +0,5%.
The decline in Treasury yields causes the dollar to fall to 111,53 against the yen. The euro is stable at 1,1333 against the US currency. The pound also stopped (1,3289 against the dollar) at the start of yet another decisive week for Brexit. Gold moved little at 1,298,81 dollars an ounce.
The price of oil remains close to the highs: Brent at 67 dollars, Wti at 58,26.
XI FLY TO ROME. THE MEETING WITH TRUMP AFTER THE G20
Everything is ready for the most awaited (and controversial) visit in recent Italian diplomatic history. Chinese President Xi Jinping will arrive in Italy on Thursday, visiting Rome and Palermo. Bilateral meetings are scheduled with the President of the Republic Sergio Mattarella and the Prime Minister Giuseppe Conte. During the visit of the Chinese leader, escorted by 700 diplomats, the signing of the memorandum (with contents still partially unknown) is expected and Italy will join the Silk Road, the first G7 country to open its doors to the a project which the European Union regards with perplexity and the USA with open hostility.
The Chinese president will continue his journey to Paris, after a stop in Monte Carlo, but not in the direction of Washington: it will still take at least a month to reach the longed-for tariff agreement between the two superpowers. Work is underway on the hypothesis of a formal meeting, to be held in June, perhaps at the end of the G-20 in Osaka.
THE FED TOWARDS THE STOP OF THE SALES OF SECURITIES IN THE BALANCE SHEET
In the meantime, Wall Street's attention will focus on the Federal Reserve meeting which will close on Wednesday with Jerome Powell's press conference. No news on rates is expected, but expectations are still very high: the central bank could signal the imminent suspension of federal budget cuts (today there are 3.800 billion T-bonds purchased during the crisis in hand) and a new target of inflation, two novelties that could give wings to the market.
BREXIT, WESTMINSTER'S THIRD VOTE TOMORROW
The top management of the Bank of England will also meet on Wednesday and will leave the level of interest rates unchanged, barring surprises. On the same day in Brussels, the Council of European premiers will take stock of the Brexit after a hectic week, marked by the outcome of the votes of the British Parliament: in fact, tomorrow the third vote of the English Parliament will be held on Theresa May's plan, already rejected twice. If approved, May herself will ask for a three-month extension for the "divorce" from the EU with respect to the already scheduled date of 29 March. The EU will have to decide whether or not to accept the time frame for divorce proposed by Theresa May.
The prime minister today will try to get in extremis support for her plan from the Dup, the anti-Eire party of Northern Ireland.
Week full of appointments for central banks. In addition to the Fed, the heads of the central institutions of Switzerland, Norway, Iceland, Russia, Brazil, Colombia, the Philippines, Indonesia and Thailand will also meet. Only in Norway is the discount rate expected to increase. It is not excluded that Roberto Campos Neto, who has just been appointed to head the Brazilian central bank, will begin with a rate cut to revive the ailing economy.
ELECTRICITY MARKETS WAITING FOR THE GERMAN MERGER
On the financial front, attention is focused on Berlin: both the boards of Deutsche Bank and Commerzbank officially confirmed on Sunday the talks for a possible merger already tackled by the two boards. This could give birth to a group with equity of 1.900 billion euros, 140 employees, in second place in Europe for jobs, with a market value of around 25 billion euros. Deutsche Bank specified that “there is no guarantee that a transaction will take place”.
For its part, Commerzbank admits the talks "in view of a potential merger" which have gained speed at the urging of the government, among other things a major shareholder of Commerzbank, interested in avoiding the collapse of Deutsche Bank, marked by losses and fines ( $14,5 billion). Even in Germany the revenge of the master state takes shape. This also opens the debate on public intervention and the rules on bail-ins.
IN PARIS THERE IS ALREADY CRISIS BETWEEN ESSILOR AND LUXOTTICA
High Voltage Council today in Paris for Essilor-Luxottica. Leonardo Del Vecchio threatens the breakup of the alliance if the request to delegate part of his powers to the deputy Francesco Milleri is not accepted, a move which, according to the French, tends to compromise the choice of the new general manager who, according to the agreements, will have to be identified, by 2020, in a third figure.
IN PIAZZA AFFARI HERA RISES INTO THE LARGEST BASKET
Piazza Affari reopens its doors after having avoided the obstacle of Moody's, which has postponed the update of the judgment (now at Baa3, one step above the level of junk bonds).
Last week, the market reached its highest level since September 2018: it has gained 14,5% since the beginning of the year. The EuroStoxx 50 index, the Dax and the Cac40 are also at the highs of the last six months.
The update of the indices of Piazza Affari starts today. The utility Hera enters the main basket and Brembo leaves, moving to the Mid Cap index: Nice and Sesa promoted, while Cembre and Ovs fall back.
DIVIDEND FOR STM, TODAY'S BOD OF RCS
The distribution of the quarterly dividend of Stm (0,06 euro) and the extraordinary shareholders' meeting of Saes Getters (purchase of treasury shares through a voluntary takeover bid) are scheduled for this morning.
RcsMediagroup board meeting scheduled for today. The accounts Reno De Medici and B&C Speaker arrive in the Star. Board also for Molmed, Triboo and Zucchi and, in Aim, for Digital Magics.
In Europe to follow the budgets of BMW and Porsche during the week. In the USA, the accounts of Nike, FedEx and the luxury flagship Tiffany's are in the spotlight.
