China has offered the European Union full access to the Celestial Empire's financial market in response to Washington's trade squeeze. Brussels said no, for now. Instead, EU President Jean-Claude Juncker took the initiative to propose a mini-agreement between European, American and Asian car manufacturers to convince Donald Trump to give life to a mini-customs agreement on four wheels that a big tariff war.
Meanwhile, a new, dramatic development is looming on the migrant front. Austria threatens to close borders after the measures agreed in Germany between Angela Merkel and the CSU.
In short, the American holiday of the 4th of July opens in a climate of caution that involves all the price lists in business today.
BEIJING DEFENDS THE YUAN, US SANCTIONS ON CHIPS
The descent of Chinese stock markets continues, weighed down by Washington's threat to impose 25% tariffs on 818 products tomorrow, including cars. The CSI index of Shanghai and Shenzhen (-1,5%) falls to new lows, Hong Kong loses 1,1%, dragging down the rest of the region, including the Japanese Stock Exchange (-0,9%) . The tariff war has hit Taiwan Micron Technology: -5,5% after the veto raised by the US to sell its chips to Chinese companies.
The intervention of the governor of the central bank of Beijing, Yi Gang, stopped the bleeding of the yuan, which climbed this morning to 6,629 against the dollar. Yi justified the currency's drop with the presence of a "strong dollar and international uncertainty", assuring the markets that both the Yuan and the Yuan will be kept stable at these levels. In other words, the depreciation is justified by the macro and international framework, and does not constitute a retaliation against tariffs.
NEW TROUBLE AHEAD FOR FACEBOOK
Brief session yesterday on Wall Street which closed its doors at 13pm New York time.
The Dow Jones finished down 0,54%, the S&P 500 0,49% and the Nasdaq 0,86%.
Technological stocks are slowing down: Facebook -2,3% after the opening in the US of a new line of investigation into identity thefts practiced by Cambridge Analytica.
Tesla's new crash (-7,2%): the market continues to doubt the company's ability to ensure the production levels promised for the Model 3.
THE OIL RUN RESUMES. ENI +2,3%
Oil rises supported by the decline in US reserves. Brent rises above the $78 barrier. US crude trades at 74,58 dollars after exceeding 75 dollars during the session, a wall never crossed in the last three years.
Chevron salt (+1,3%). Eni advances in Piazza Affari (+2,3%) on the wave of the merger between Eni Norge and the independent Point Resources. The new company, in which the Italian oil company will have a 70 percent stake, will produce 180.000 barrels of oil a day this year.
THE MEXICAN PESO TAKES FLIGHT. EUROS AT 1,1665
On the currency front, the euro holds at 1,1665. Of note is the leap forward in the Mexican peso (+2,6%) to its highest level for over two years, in reaction to the appointment of President Obrador.
MILAN, LEADER PRICE LIST. IN VIEW OF A CAREFUL DEPARTURE
A pale sun appears on the skies of Berlin and the European stock exchanges have taken advantage of it. However, no one is under any illusions: the cracks caused by the migration issue have not been repaired, especially with regard to Austria which threatens to close the Italian border: the opening of markets is seen this morning declining throughout the Old Continent.
Domestically, operators appreciated the words of Minister Giovanni Tria in Parliament, much less the Dignity decree created by Luigi Di Maio: the honeymoon between the pentastellato leader and the entrepreneurs seems to be over.
Piazza Affari proved to be the best (+1,57%, 21.784 points), also thanks to the well-tuned banks. The index returned to the levels of the beginning of the year, eliminating the losses.
The gains of the Frankfurt Stock Exchange are partly included: +0,9% from a maximum of +1,4%, before new difficulties emerged in the majority.
The other European lists are on positive territory: Paris +0,76%, Madrid +1,12%, London +0,81% and Zurich +1,09%.
TRIA EXCLUDES CORRECTIVE MANEUVER
The government excludes a corrective maneuver in 2018 and announces a discussion with the European Commission to revise the 2019 deficit/GDP ratio upwards, without compromising the downward trend of the structural balance. Economy Minister Giovanni Tria says it, illustrating the lines of action of his ministry to the Chambers.
"It is not the government's intention to adopt any corrective measures during the year", Tria said, explaining that the trend in the requirement in the first half of the year is "in line if not better" than expected by the previous executive, which in the Def estimated a debt trend of 1,6% of GDP for the whole of 2018. Reaching a deficit/GDP ratio of 0,8% in 2019, as estimated by the Economic and Financial Document, instead implies "an excessively drastic adjustment" and the executive, continues Tria, does not deem it "useful to adopt heavily pro-cyclical policies because there are risks for a moderate downward revision of the estimate for 2018".
PRAET: INFLATION WILL RECOVER EVEN AFTER QE
Peter Praet, chief economist of the European Central Bank, is optimistic that the recovery of inflation in the euro area will continue even after the end of the program of Qe purchases. "The underlying strength of the eurozone economy, coupled with well-anchored long-term inflation expectations, give us confidence that the process of inflation convergence towards the ECB's target can continue."
THE SPREAD CLOSES AT 236 POINTS
The Italian secondary worsened in the afternoon, ending just above the lows of the session with the spread reaching within a whisker of 240 basis points.
Thanks to today's pause in the US markets for Independence Day, a climate not inclined to risk prevailed on the market: after a decline below 230 cents, the BTP/Bund yield spread on the ten-year period closed at 236 cents with a tip to 238,5.
INTESA AND UNICREDIT AWARDED BY MORGAN STANLEY
The banks led the rise in Piazza Affari. The sector index closed up 2,3% against a more modest 0,7% for the European sector.
Morgan Stanley restarted coverage of Intesa (+2,1%, Equalweight rating) . On Unicredit (+2,9%, overweight) the broker simultaneously lowered the target price of the stock, bringing it to 19 euros from 21 euros, or with a potential upside of the stock of 32%.
BPM SALES AWAITING THE AUCTION ON BAD LOANS, UBI HIRES
Banco Bpm (+1,8%) continues to benefit from the expectations of further acceleration of the group's derisking plan. The bad debt auction should be held in the first part of July. The bank will evaluate how many credits to sell, depending on the offers received, ranging from a minimum of 3,5 billion euros to around 8 billion euros, in the event of very advantageous conditions. In the best-case scenario, Banco BPM could sell all the non-performing loans, amounting to around 9,5 billion.
The share, after having risen to the highs of the period (2,6415 euros) slowed down in the final stages. But it is almost on par with the beginning of 2018, a year that is proving to be very volatile. At the end of May it lost -20%, at the end of February it gained +20%.
Ubi Banca +1,1% will hire over 2018 people in 330 to support digital innovation and new customer service models.
Outside the main basket, Carige achieved +6,3%.
Generali turned higher after a weak start and finished up by one point. This morning the decision taken by Credit Suisse to lower the recommendation to Underperform from Neutral weighed. Target reduced to 14 euros from 16,50 euros.
WIND 3 LENDS TIM A HAND (+3,3%)
Tim (+3,3%) was yesterday's best stock. The company has also signed a multi-year strategic agreement with suppliers which, according to CEO Amos Genish, “will allow both Tim and industry players to be able to identify the best industrial strategy for the short and long term.
But at the origin of the increase there are above all the multiples recorded for the sale of Veon's share in Wind 3: the Chinese of CK Hutchison have 50% for 2,4 billion euros.
Prysmian, under capital increase, gains 3,9%.
MONEY ON LEONARDO AND FINMECCANICA
Money on Leonardo (+2,7%), which has signed a 5-year contract with the British Ministry of Defense for simulation systems.
Fincantieri rebounds by 4%. CEO Giuseppe Bono explained that the company has guaranteed work for the next ten years, while the agreement on Stx France, which is now being closed, offers the possibility of further increasing production capacity.
Fiat Chrysler (-0,2%) ended June in Italy with a 19,2% drop in registrations, compared to -7,2% in the car market. Opposite situation across the ocean. In the US, 202.264 vehicles were sold in June with an increase of 8% compared to June 2017. Sales were driven by Jeep, which saw a +19% to 86.989 units, Ram (+6%) and Dodge ( +9%).
JUVENTUS LEAP FORWARD PUSHED BY THE CR7 EFFECT
In the Exor team, the spotlight on the international scene is concentrated on Juventus, +3,60% on the back of a sensational voice: Cristiano Ronaldo could wear the black and white shirt in the next season.
Still negative notes from Mediaset which after yesterday's -3,65% yields another 2,6%. Today the presentation of the new season will be held in Montecarlo.
RECORDATI'S LANDSLIDE CONTINUES, MAIRE'S BOOM
The fall of Recordati also continues, leaving almost 4% on the ground at 28,63 euros, approaching the price of the takeover bid (28 euros) that Cvc Capital Partners will launch after the acquisition of 51,8%.
Note the leap by Maire (+4,19%): the group signed a preliminary agreement with Carbon Holdings for the construction of polyethylene units to be built at the Egyptian Petrochemical Complex in Ain Sokhna.
