“Perhaps in a few years we will have to thank Trump – said Romano Prodi – He reminded us that we Europeans, if we do not remain united, risk a bad end”. Thus the former EU president echoes the very harsh sortie of Angela Merkel, who from a beer hall in Munich (a circumstance that evokes a sinister memory) noted that "from now on Europe will have to do it alone" , after noting Trump's closure on the environment, trade and common defense.
In the new context, Italy is once again perceived as the weak link in the Eurozone, as evidenced by the pressure on the euro (1,1235, -0,4% against the dollar), the sharp decline in Piazza Affari and the increase of the spread on the Bund in the face of the prospect of elections in September, perhaps on the same day as Germany. The markets didn't take it well: a long phase of negotiations between the parties will probably begin after the elections, just what is not needed in the face of a situation that requires drastic and rapid choices.
TOKYO, UNEMPLOYMENT AT 2,8% AT THE LOWEST SINCE 1994
The tensions over Italy (and the bailout risk for Greece) marked the semi-festive atmosphere of the financial markets. London and New York reopen today, but the Chinese, Taiwan and Hong Kong stock exchanges are closed.
Open Asian stock markets were weak: Tokyo dropped by 0,5%, despite the new fall in unemployment, which fell to its lowest level since 1994 at 2,8%. Seoul also down (-0,6%).
Oil prices moved little: Brent -0,3% to 52,14 dollars a barrel, Wti at 49,82. Eni closed down 0,2%. For Kepler Chevreux, the six-legged dog remains the sector's favorite stock (buy, Target price 17,5 euros). Saipem -0,1%.
BUSINESS PLACE FALLS BELOW 21 THOUSAND POINTS
A sitting with no history in Europe, except for two thorns: Greece, hostage to the tug of war between the IMF and the EU (see Germany) over a possible debt cut; Italy, now on its way to early voting. Mario Draghi reiterated the accommodating policy of the ECB.
Piazza Affari closed heavily down: -2,01% below 21 points, stopping at 20.783. Instead, the session in the main European markets was without particular shocks: Madrid -0,19%; Paris -0,08%; Frankfurt +0,21%.
DRAGHI: RECOVERY IS THERE, BUT QE CAN'T BE TOUCHED
The recovery "is getting stronger". And since it is also driven by domestic demand, Mario Draghi believes it is "less vulnerable" to any "external shocks". But, speaking before the European Parliament, the banker put his hands forward: "We still need very accommodating monetary policies - he said - also because wages are still growing too slowly".
Draghi also cooled down forecasts of a decrease in bond purchases from 60 billion as early as September. Finally, he stressed that "we must not be afraid to change the Treaties", referring to the plans announced by Angela Merkel and Emmanuel Macron to strengthen the Eurozone also by reviewing the agreements.
In view of the ECB meeting on Thursday 8 June in Tallinn, however, the controversy of the Bundesbank is rising. The ultra-accommodative policy of the European Central Bank is "still appropriate in principle" but it is legitimate to debate the timing of its abandonment in light of the consolidation of inflation, Jens Weidmann, president of the German central bank and representative for Germany in the ECB council.
THE SPREAD CLOSE TO 190 POINTS. BTP AUCTION TODAY
A day of large correction for the Italian bond, with the spread widening by more than 10 points: the upcoming auctions and the renewed speculation on early elections have fueled the selling, combined with a particularly thin market due to the holiday closure of the London and New York.
The Btp/Bund spread closed the session at the day's high of 189 basis points, the highest level since last May 4, against 177 at the last closing. The 2,20-year rate reached a peak during the day of XNUMX% (highest since mid-May) in the morning.
The further widening of the spread in the afternoon was due to the fall in yields on Bunds (the 7,5-year yield dropped to its lowest level for about four weeks). Today, the offer of up to 5 billion of three medium-long term securities is expected: the reopening of the 10- and 2024-year benchmark BTPs and the October XNUMX Ccteu.
Despite yesterday's correction, last week's rally allows yields on 5 and 10 years to remain below the levels of a month ago: closing yesterday at 0,90% and 2,18% respectively against 1,04% and 2,29% of the auctions at the end of April.
ITALIAN BANKS INCREASINGLY IN THE SIGHT: -3,3%
Another hot day for the credit sector: meanwhile, uncertainty about the fate of the Veneto banks, the weak link in the system, is growing. Yesterday morning the governor of the Banque de France, Villeroy de Galhau, also thought about warming up the atmosphere, stating that the problems of the Italian and Portuguese banking sector must be addressed promptly and definitively, since "it is not normal" that difficulties at the local level damage the image of the banking system at the level of the whole euro area.
In this situation, the basket of the Italian banking sector dropped 3,27%, against a drop of 0,35% in the European sector, recording the worst drop for almost four months. Among individual securities, Ubi lost 4,7%, Unicredit 4,3% and Banco Bpm 3,9%.
INTESA BETS ON TOBACCO
Intesa Sanpaolo (-2,06%) is the worst blue chip in the Eurostoxx 50 index (almost unchanged). The risk of early elections in Italy weighs negatively on the stock. In the meantime, the institute is preparing to cut costs with the aim, foreseen in the next industrial plan, of lowering the cost/income ratio from 49 to 45%, among the lowest in Italy, as reported by the Financial Times. Intesa counts on the recent acquisition of the bank that serves 20 tobacconists in Italy, activating a mechanism that could reduce its network of 3 branches by over a third.
UNDER FIRE SOUL. DOUBTS ABOUT POSTE STRATEGIES
Strong reductions also for insurance companies and asset management companies: Banca Generali -3,6%, Generali -2%, Unipol -4%. Remaining among the financials, Anima loses 3,4% after the press rumors of the weekend on the possible lower commitment in the asset management of Matteo Del Fante, new CEO of the shareholder and partner Poste Italiane (-2,47%). Banca Akros cut the stock recommendation to neutral from accumulated with the target price remaining at 7,1 euros. The uncertainty about asset management strategies could also have repercussions on the possible finalization of a deal with Banco Bpm for the sale of Aletti Sgr to Anima.
BREMBO, FRANO FERRARI AND FCA ADVANCE
Only Brembo gained positions (+0,9%) on the day in which the split of ordinary shares became operational through the assignment of five new shares for each held. Banca Akros adjusted the target price of the share to 15,5 euro from 77 euro, confirming the accumulated rating.
Ferrari closes down 1,9% after victory at the Monaco GP. Also down were Fiat Chrysler (-1,7%), Stm (-1,4%) and Leonardo (-1,6%).
LUXURY UNDER PRESSURE, BUT THE MARKET IS IMPROVING
Mediaset moved up (+0,9%), benefiting from the new political scenario. Italgas thud (-3,7%) on the eve of the presentation of the business plan. Enel (-2,2%) and Telecom Italia (-1,4%) fell. The other utilities are also bad: Snam -1,1%, Terna -1,4%.
Ferragamo (-0,4%) and Moncler (-3,8%) fell despite the positive indications on the luxury market that emerged from the Altagamma Monitor, produced by Bain & Company. According to the research, the world market will grow between 2 and 4% this year.
