A breath of optimism comes from the Asian markets. The euro recovered from its lows to 1,2589, futures on the S&P +0,6% and oil are up. In the absence of indications from Wall Street, today closed for Memorial Day. According to Bloomberg, Tokyo's stability -0,08% and the gains of other Asian markets (Hong Kong +0,31%) are also linked to polls arriving from Athens registering a recovery of pro-euro parties.
The climate in Europe remains at high tension. In this setting, squeezed between the fire in Athens and the even more disturbing difficulties in Madrid and Barcelona, the Italian Treasury is starting yet another trial by fire. Between this morning and Wednesday, in fact, Italy is auctioning 19 billion bonds, the prologue to the second issue of the BTP Italia which will be offered to the public of savers from 4 to 7 June. In summary, today 3,5 billion Ctz will be offered, tomorrow it will be the turn of 8,5 billion six-month BOTs (the securities which, at the end of November, were placed at 6,5% will be replaced), Wednesday there will be the auction of five-year (3,5 billion) and ten-year (2,75 billion) BTPs.
The tour de force of the Italian Treasury coincides with a very hot moment, perhaps the most serious in the history of the European Union. The ECB is committed to supplying Greek banks with the cash needed to avoid closing their doors. Meanwhile, the market has to face two warnings coming from Spain. On Friday, the autonomous region of Catalonia, perhaps the richest in the whole country, launched a request for help from the central government in Madrid because it risks finding no more lenders: said the president of the local government, Artur Mas.
Meanwhile, the Spanish banking giant Bankia has asked the Madrid government for 19 billion euros to avoid bankruptcy, while one of the world's leading rating agencies, Standard & Poor's, downgraded the bank's debt to junk status. According to the Financial Times, the Spanish government is planning an intervention deemed "unorthodox": the issue of government bonds to be transferred to Bankia which, in turn, will transfer them to the ECB to obtain the necessary cash in exchange. An operation which, according to the newspaper, had a bad reception in Frankfurt.
Newedge, one of New York's leading hedge brokers controlled by Credit Agricole and SocGen, announced that starting this morning it will no longer execute buy orders on the ADRs of Greek securities traded on Wall Street (Alpha Bamk, Hellenic Coca Cola, Paragon ships), a "precautionary" decision in view of a possible exit of Greece from the euro area.
The result was a further widening of the spread between the XNUMX-year BTP and the German Bund, which rose to 426, 11 points higher than Thursday night. The yield of the BTP is 5,63%. And to think that at the beginning of the day, Mario Monti's announcement of an easier path for Eurobonds had caused the spread to drop below 400.
The euro is also under fire: last week the single currency lost 2,1% against the dollar to 1,2496 (at its lowest level since July 2010); the euro is down against 16 of the 17 most traded currencies. The only exception is the Swiss franc, held back by central bank purchases. The Wall Street Stock Exchange is closed today. On Friday, US stocks closed lower: Standard & Poor's 500 -0,22%, Dow Jones - 0,60% and Nasdaq -0,07%.
For the Milan Stock Exchange, the balance for the week, despite the many tensions, is a slight increase of 0,8% (the previous week had closed with -7%) which brings the balance from the beginning of the year to -12,7, XNUMX%.
Among the topics to highlight:
– The market response to the decree law on the separation between Eni and Snam. The stock of the gas company was rewarded by JP Morgan which raised the target price. Analysts like the stand-alone Snam even if the process of transferring the shares from six-legged dog to CDP has not yet been defined.
– The shareholders' meeting of Understanding (+0,7% in Friday's session). In addition to the approval of the 2011 accounts, the appointment of the supervisory board and the vice president of the body is envisaged.
– Crucial week for the maxi-project of insurance aggregation, Friday the securities involved were in great effervescence: Premafin +3,9% (after suspension due to excess hike), Fondiaria-Leaves + 0,8% Milano Insurance +9,8%. Spotlights also on Telecom Italy, down 1,9% due to the stock's possible exit from the Euro Stoxx 50 European index.
