Markets under stress but, all in all, with steady nerves. The emergency on the oil front weighs heavily after the attacks on tankers in the Strait of Hormuz, while no one is under the illusion that, after the violent protests of recent days, Hong Kong's anger will not explode again. But traders' attention is directed above all to the decisions (and promises) that the Fed will take next week rather than to macro data, which offer no hints of optimism. A trend that is also affecting Europe, where rates are falling despite the approaching showdown for Italy, while in London an overwhelming success of Boris Johnson, proponent of hard Brexit, is looming. In this context, the markets are heading into the weekend taking refuge in the bond market, without relying too much on the data that will arrive from China in the morning.
US BUSINESS ASKS TRUMP TO BREAK
The Hong Kong Stock Exchange is starting to close down for the third consecutive day: while the protest outside the headquarters of the local political authority has subsided, the Hang Seng index is down 0,6%.
The Chinese markets are flat (-0,1% for the Cis 300 index) awaiting the data on industrial production. Skirmishes continue in anticipation of the G20. There will be serious consequences if President Xi fails to show up for the appointment, thunders Trump's economic adviser, Larry Kudlow.
But Beijing can count on an ally: 600 US corporations yesterday invited the Trump administration to urgently end the dispute over trade with China and with other partners.
OIL RISES AGAIN AFTER POMPEO'S ACCUSATIONS
More urgent is the crisis that exploded in the Straits of Hormuz, the busiest oil route on the planet. Secretary of State Mike Pompeo has accused Iran of being responsible for the attack on two oil tankers. Tehran, which participated in the rescue operation, said that none of it was true. The main effect of yesterday's torpedoes was to obscure Japanese Prime Minister Shinzo Abe's mission to Iran, in search of a compromise on Washington's behalf.
OIL SAVE WALL STREET RISE
Brent oil traded on Asian markets this morning at 61,8 dollars a barrel, up 1%, after yesterday's gains of 2,2%.
The push from the energy sector allowed the US markets to close in progress: Dow Jones +0,39%, S&P 500 +0,41%. The Nasdaq advanced 0,57%. In the rest of the list, Walt Disney is advancing (+4,4%) after the upgrade of Morgan Stanley on the new contracts of pay channels.
Positive energy sector also in Milan: Eni +0,7%, Saipem +1,1%, Tenaris +1,9%.
HISTORICAL RECORD FOR FIVE EUROPEAN BONDS
The euro strengthened this morning to 1.1273 against the dollar. A slight increase is expected for the Stock Exchanges. But attention on both sides of the Atlantic is focused on the impressive run of the bond markets, in an attempt to anticipate the likely drop in rates. The 2,08-year Treasury Note returned to its lows for the period at XNUMX%. Even more sensational, however, is the trend in Europe despite the fact that no next moves are foreseen by the ECB: Draghi's bazooka, now one step away from exiting, does not have much ammunition available.
Yesterday the bond yields of five Eurozone countries reached an all-time low: Germany, Holland, Ireland, France and Portugal. Even Italy, despite the increasingly concrete threat of the infringement procedure, joins the party.
12,5 BILLION LONG SECURITIES PLACED IN TWO DAYS
At the end of the session, the ten-year BTP fell to 2,36% (-7 basis points), with a spread of 261 points.
In the morning, the Treasury had assigned 6,5 billion euros in 3, 7 and 15-year bonds with declining yields on all maturities.
In particular, the 15-year-old title was snapped up, assigned at 2,87% in the face of very strong demand (bid to cover at 1,56 times, the maximum for the year).
FOREIGNERS 64% OF THE NEW BTP 20
The performance came after the success of the 20-year bond, much appreciated by international operators in search of yields: 64% of the demand came from abroad. Fund managers bought about 49% of the issue, while about 30% was subscribed by banks. Investors with a long-term investment horizon accounted for over 9%, hedge funds 12%.
In two days, the Treasury has placed, in a crowd of requests, 12,5 billion euro of Btp.
However, the rush of the market does not reduce the worries about the confrontation with Brussels. The European Commissioner for Economic and Monetary Affairs, Pierre Moscovici, said that the EU is ready for the infringement procedure if Rome does not make new commitments to achieve the budget targets agreed last December.
Rising oil and falling rates were also one of the keynotes of the stock markets.
PIAZZA AFFARI WAS THE BEST STOCK EXCHANGE IN EUROPE
Piazza Affari was the best Stock Exchange: +0,82%, at 20.630 basis points.
Frankfurt follows (+0,45%), supported by the conclusion of the auction for the assignment of 5G frequencies. Paris +0,01%, London -0,01%, Madrid +0,06%.
ITALY-FRANCE: AGREEMENT ON FINCANTIERI, FCA ON THE RUN AGAIN
It seems incredible but a wind of peace is blowing between Italy and France, a harbinger of good business. Everything seems ready for the longed-for joint venture between Fincantieri (+4%) and Naval.
Meanwhile, the French finance minister, Bruno Le Maire, reiterated that a merger with Fiat Chrysler remains an interesting option for Renault +1%.
UTILITIES AND BANKS ADVANCE
Analysts on the move on utilities. Enel goes up (+1,4%): JP Morgan has started hedging with Overweight.
Italgas +1%. Morgan Stanley and Mediobanca raised their respective target prices on the stock of the gas distribution company.
Italian banks in the spotlight thanks to the drop in the spread, in contrast with the rest of Europe, depressed by the continuous decline in inflation expectations (the 5-year forward has reached an all-time low of 1.18%).
The rebound is led by Unicredit (+1,47%), ahead of Bper (+1,2%) and Intesa Sanpaolo (+0,77%).
Azimut flies (+3,4%) in the managed sector.
SPRINGER RESIVES RCS, WEDDING AT THE GAVIO HOUSE
on the wave ofFriendly takeover bid in Germany by KKR on Axel Springer RCS Mediagroup flies +7,3%.
In the evening, the Gavio group announced the merger by incorporation of Sias into Astm. The goal, explains a note, is to "simplify the chain of control through the creation of a single listed company". Astm is expected to launch a partial takeover bid on 5% of Sias with the aim of reaching 66,693% of the subsidiary at a unit price of 17,5 euros.
