G7 weekend. Indeed, of the G6+1, as the meeting of the Greats to be held today and tomorrow in Canada in Charlevoix was defined to underline the profound distance between Donald Trump and the others on trade, Iran, the environment, just to mention the hottest dossiers . An agreement seems impossible and it won't even be easy to draw up a joint statement.
The markets, slowing down, take note of this. But expectations are already focused on the next moves of the central banks: on Wednesday the Fed will communicate the discounted rate increase and provide indications on future increases. On 14 June it will be up to the ECB to draw the road map towards the end of Qe.
The euro moved little this morning at 1,179 against the dollar.
Here is the situation waiting for a probably “hot” weekend.
Profit-taking on technology stocks after a roaring week held back Asian stocks: The Japanese Stock Exchange lost 0,3%, the yen strengthened against the dollar to 109,7. Third consecutive session of decline for the CSI 300 index of the Shanghai and Shenzhen stock exchanges: -1,3%. Same negative variation for Hong Kong.
In China, the effects of the creeping trade war with the United States are beginning to be seen, in May the trade balance surplus fell to 24,9 billion dollars, from 28,3 billion dollars a month earlier: the consensus was 33 billion. Imports increased by 26%, much more than expected.
In New York setback for the big names in technology. Microsoft closed down 1,6%, Facebook -1,7%. The Nasdaq index falls by 0,7%.
The Wall Street indexes are better: Dow Jones +0,38%, the S&P 500 -0,07% almost flat.
The best stock was McDonald's (+4,4%). Among the sectors, energy shines (+1,1%).
Brent oil is down slightly to 77,2 dollars a barrel this morning, from +2,6% yesterday. Iraq's Energy Minister Jabbar al Luaibi said boosting production was not on the agenda at the June 22-23 OPEC assembly in Vienna. Meanwhile, Reuters reports that Venezuela is increasingly in difficulty in guaranteeing supplies to customers, the accumulated delay is about a month.
In Piazza Affari Saipem (+5,06%) was the best stock. But oil has nothing to do with it. Rete Ferroviaria Italiana (FS Italiane Group) and the Cepav Due Consortium have signed the contract for the construction of the first construction lot of the Brescia-Verona high-speed/high-capacity section, for a value of 1,645 billion. Eni +1,17%.
CURRENCIES, ARGENTINA SUFFERS. TURKISH RATES AT 17,75%
The major moves on interest rates are causing new jolts in emerging markets. Traders are convinced that Jay Powell, unlike Janet Yellen, will proceed higher without taking into account the consequences of tapering on emerging economies most exposed to dollar debt.
The Argentine peso weakened, at 24,98. During the night the agreement with the International Monetary Fund was announced. Argentina will be able to have up to 50 billion dollars in aid, divided into two tranches. In exchange, the government of Mauricio Macrì has undertaken to anticipate the achievement of a balanced primary budget.
The Brazilian real continues to suffer, falling to 3,90 against the dollar, from 3,85 the day before. The cross is at the lows of the last two years.
The surprise comes from Turkey, two weeks after the vote. Yesterday there was an unexpected tightening by the central bank as rates increased by 125 points to 17,75%. Perhaps a jolt of independence from President Erdogan, a supporter of expansion at any cost, perhaps an obligatory move to avoid collapse. Or, more likely, a tactical move by the sultan in a pre-election key. The Turkish lira rose to 4,48 against the dollar.
BANKS, TESTS OF MERGER BETWEEN DEUTSCHE AND COMMERZBANK
Session without too many jolts for the European stock exchanges which focused on the monetary strategy of the European Central Bank in anticipation of the meeting on 14 June. The prediction of the announcement of the closing date of the Qe favored the new rise of the euro, which rose to 1,182 against the dollar (+0,4%). The new signs of slowdown in the German economy also weighed on the performance of the shares: industrial orders fell by 2,5%.
However, the construction site of finance beyond the Rhine is in full swing, grappling with the difficulties of the big banks. The two most important institutes are talking in view of an aggregation. Bloomberg reports that the president of Deutsche Bank has held confidential talks, both with the main shareholders of Commerzbank and with members of the Merkel government.
MILAN -0,18%. ONLY MADRID SHINES
Little movement in Milan (-0,18%) slowing down in the final to 21.767,80 on volumes of 2,5 billion, down compared to the over 3 billion turnover achieved in recent days.
Similar trend for the other stock markets of the Old Continent: London, Frankfurt and Paris lose around 0,1%.
The exception is again Madrid (+0,38%) still on the rise. The Ibex index has risen more than 3% since the opening of trading last Friday, when Mariano Rajoy was discouraged and Pedro Sánchez became the new Spanish head of government.
On the macroeconomic front, the GDP of the Eurozone grew by 0,4% on a quarterly level and by 2,5% on an annual basis in the first quarter of this year. The data is in line with the preliminary one and with the consensus of economists, but slowing down compared to the last three months of 2017 when it marked +0,7%. However, this is the weakest figure since mid-2016.
THE SPREAD CLOSES AT 250. BTP AGAIN OVER 3%
The dam of Italian debt securities did not hold up in the end. The German 0,50-year yield moved back above XNUMX% for the first time in over two weeks.
The BTPs closed the session at lows, with the spread on the Bund over 250 points, about 20 points above the low seen in mid-morning at 232.
The 3-year rate returned to 2%, for the first time in a week. The 10-12 year segment of the curve flattened by XNUMX points.
AUCTIONS: THE TREASURY LOWERING BOT OFFERS
The market begins to focus on next week's auctions. The wait is concentrated above all on the offer of long-term securities, which will be announced tonight, with closed price lists.
Unicredit envisages an offer for an overall limited amount, up to 6,75 billion Btp on maturities of 3, 7 and 30 years. Intesa Sanpaolo is even more cautious, assuming a total amount of up to 4 billion over 3 and 7 years and no offers on the extra long term. Other operators hypothesize an extra-long offer limited to 15 years, or split over two different maturities.
In the evening, the Treasury announced that in the 12-month BOT auction on Tuesday 12th, securities worth 6 billion will be offered, against the 6,5 billion maturing.
BANKS IN BRAKING, BUT UNIPOL WAKE UP BPER
Italian banks are weak again. The sector index dropped 1,21% (+0,42% for the European sector).
In contrast, Bper (+1,93%) promoted to buy by Equita Sim. The first Unipol shareholder +0,9%, invites executives to proceed expeditiously on the path to reducing non-performing loans, the CEO Carlo Cimbri said he expects "strong and quick responses" on this issue.
Banco Bpm also rose, +0,8% (target price 3,9 euros).
Down Unicredit (-1,6%) and Intesa Sanpaolo (-1,1%). Ubi Banca -1,5%: Credit Suisse lowered the recommendation to Neutral.
BATHERS (ALLOY) COOP CREDIT CAN'T BE TOUCHED. POP. SONDRIO -1,3%
In an interview with Reuters, Lega Senator Alberto Bagnai said the government must block the cooperative credit reform as long as European rules continue to penalize Italian banks, after Prime Minister Giuseppe Conte yesterday announced the intention to review the regulations concerning BCC and cooperative banks. This is a move that creates uncertainty, because it is not clear what will happen to the banks that have already turned into joint stock companies.
Banca Popolare di Sondrio has lost 1,3%: for a trader Conte's statements distance his transformation into a joint stock company and therefore also the m&a prospects.
In assets under management, Poste Italiane and FinecoBank were weak, both -0,3%. Generals +0,3%. Catholic +1,6%.
MORGAN STANLEY: FCA CAN DOUBLE IF IT DOES THIS
Recovery day for FCA (+3%), supported by the Morgan Stanley report which reiterates the "overweight" recommendation with a target price of 23 euros.
Analysts think that the stock could double its value if these seven objectives are pursued: Spin off or sale of Magneti Marelli; Spin off or sale of Maserati and Alfa Romeo; Obtaining an "investment grade" rating; Optimization of the financial arm; Exit of Fiat brands from EU and Latin America markets; Greater transparency on Jeep/RAM strategies; development of self-driving projects launched with Waymo.
LUXURY ON SALE AFTER SALES ON HERMES
Luxury paid for the downpour of sales on Parisian brands starting with Hermès (-5,11%) after Exane Paribas revised its ratings downwards for the third time in a week (underperform from neutral) after the recent increases. Lvmh also suffered a sharp decline in Paris (-3,3%). And it didn't go better for Kering (-4,15%).
In Piazza Affari Salvatore Ferragamo lost 3,43%, Moncler -2,57%, Brunello Cucinelli -4,76%, in the wake of the European sector, which stands at -1,38%.
TELECOM, SEPARATE NETWORK WITHIN THE YEAR. FLY SAES GETTERS
Mediaset slowed down (-0,9%). Telecom Italy -1,4%. CEO Amos Genish has promised to separate the network within the year, after yesterday Ag Com gave the first go-ahead.
In the rest of the list, a leap by Saes Getters (+14,5%) after the signing of an agreement with the American Entegris for the sale of the gas purification business, which will result in a capital gain of 229 million.
Astaldi still on the rise (+2,85%): a potential buyer valued 33% of the Bosphorus bridge at 467 million dollars. The company's capital increase is conditional on the receipt of a binding offer on the Turkish asset.
