The Italy syndrome has crossed the borders of Europe. The risk of a financial collapse of the Bel Paese, witnessed by the explosion of the spread, is at the origin of the decline of Wall Street and Asian stock markets. In New York, the landslide in banking stocks (-4% the sector average, JP Morgan even worse) caused a sharp drop in the indices: Dow Jones -1,6%, S&P 500 -1,2%, Nasdaq -0,5, 2,80%. The run on safe-haven assets pushed the yield on ten-year Treasury bonds to around the lows of the last two months, although it subsequently stabilized around 1,9%. The contagion spread to Asian markets this morning: Tokyo, in particular, is dropping XNUMX% before the closure, at its lowest in six weeks.
TRUMP'S ULTIMATUM ON CHINA DUTIES
The yen is running (108,7 against the dollar), the traditional refuge currency in times of crisis. Singapore and Seoul also fell by an abundant 2%. A similar script for the Chinese markets, but here Donald Trump's clear-sighted diktat plays out, who warned that within a few days he will publish the list of Chinese goods, services and companies, on which sanctions will be imposed. Hong Kong -1,3%. CSI 300 index of Shanghai and Shenzhen stock exchanges -1,6%.
TODAY THE OFFER OF 4 BILLION BTP AND CCTEU
But the attention of the markets is aimed at Italian crisis which, among other things, is eroding the value of the euro, which dropped this morning to 1,153 against the dollar. Time X strikes at 10, when it will be understood how deep the crisis of confidence is in the Bel Paese denounced yesterday by the governor Ignazio Visco. At that time, the Treasury is auctioning 2,25 billion euro of 1,75-year BTPs and 18 billion euro of five-year BTPs. Someone hopes that an imminent ten-year expiry of XNUMX billion euros can give some support to the very delicate placement.
THE ALARM COMES FROM THE INTEREST CURVE
But the premises, after a creepy day, are really critical, above all for the flattening of the yield curve: the two-year bond reached 2,63%, more than three times as much as the 0,80% of the day before. The spread between the two-year and the ten-year bonds fell to 33 basis points, one step away from the inversion of the interest rate curve, an event which occurred at the end of 2011. The outcome of the auction will be communicated at 10.30.
THE SPREAD FLYED TO 324 POINTS, NEW SOS FROM MOODY'S
We arrived at Tanto after an incredible day, punctuated by the psychodrama of politics, to which the notorious markets responded strongly.
Before falling back to the 282 basis points area, the BTP/Bund yield premium soared to 324 cents – peak since May 2013 – with the 3,15-year rate dropping to around 2014% after a flare-up on the highs from May 3,44 to XNUMX ,XNUMX%.
The distrust also affected the securities at auction: the 5,5 billion six-monthly bots at auction this morning were assigned a yield of 1,213% – a record since February 2013 – against the -0,421% of the placement at the end of April.
The new statements by Moody's about the possibility of rejection of the sovereign rating contribute to exacerbate the situation. According to the Canadian agency Dbrs, however, Italy's debt situation is "still manageable".
Meanwhile, the ten-year spread between Italy and Spain, despite being hit by a difficult political crisis, has widened by more than 150 points, the highest since January 2012.
In short, "What a mess!", as the Financial Times website headlined yesterday morning before the new chapters of the Italian political psychodrama which has reserved a flurry of surprises. In the end, a new attempt at a Lega-Cinque Stelle government (without Paolo Savona) with Northern League traction emerged. Luigi Di Maio, after threatening impeachment and even life imprisonment for President Sergio Mattarella via TV, says he is willing to collaborate. At this point, a breath of fresh air for the exhausted price lists cannot be excluded. Also because speculation is ready to collect the first fruits of the gains made possible by the madness of Italy, a country with a strong trade balance surplus and with the best primary requirement in the OECD area, which yesterday found itself on the verge of default .
MILAN -2,65%, MADRID AND LISBON ALSO IN CRISIS
Piazza Affari restarts after a day of heavy and insistent selling, especially on financial stocks. However, the price list managed to close above the lows of the session, helped by the resistance of the energy.
Milan left 2,65% on the field, falling back to 21.350 points. Very intense exchanges for a total of 5,4 billion euros.
The suffering of Piazza Affari has infected the other markets of the Eurozone: Madrid (-2,49%) and Lisbon (-2,60%) have fallen; Frankfurt -1,53%; Paris -1,29%. London (-1,23%) and Zurich (-1,66%) did not do much better.
SAIPEM BACKS THE TREND (+3,2%)
Oil prices are holding back this morning: Brent trades at 74,95 dollars (-0,1%), the decline in WTI continues (-0,4% to 66,46), under the pressure of the increase in shale extraction oil.
Oil stocks went against the trend in Piazza Affari: Saipem (+3,2%) was the best blue chip. Brilliant seat for Saras, +2% to 1,88 euros. Eni and Tenaris are also on positive ground.
IN MAY BANKS -25%, MPS BOUNCES
The day was dominated by sales on financials, starting with banks. The sector index, despite a timid recovery towards the end, closed with a drop of 4,7% to 9.660 points, the lowest level in the last twelve months. Since May 4, it has left a quarter of its value on the ground. The credit crisis has infected the European sector: -XNUMX%.
Along the list of stocks that have lost 5% or even more. The former Popolari were particularly affected: Banco Bpm -6,7%, Bper and Ubi -5%. Unicredit does worse (-5,6%), while Intesa leaves 4% on the ground.
Monte Paschi goes against the trend (+3,8%): the failure of the Conte government attempt has temporarily distanced the bellicose intentions of the League. From Frankfurt came a curt reminder to respect the agreement which provides for the return of the institute to the private area.
MANAGED AND POLICIES ALSO UNDER FIRE
However, sales did not spare insurance and asset management. Poste Italiane -4,5%, FinecoBank -2,4%. Banca Generali leaves over 6% on the ground, animates 10%. Generals -3,5%. UnipolSai -5%.
GOLDMAN CUTS UTILITIES, KEEPS FIAT CHRYSLER
Sharp decline also for utilities. Goldman Sachs cut the target price of all of them: Snam -4%, Italgas -5%, Terna -3,7%. Enel -2,4%: the Brazilian Eletropaulo announced that the June 4 auction was suspended by the appeals court.
Waiting for the Investor Day on Friday, Fiat Chrysler holds (-0,4%). Leonardo's thud (-5,3%). Telecom Italy -2%.
SMALL CAP: ZEPHIRO FLIES (+36%), SUFFERS OVS
Even outside the main basket there are very few positive notes.
To record the flight of Zephiro (+36%) after Edison's decision to start, once the tender offer has been authorised, the purchase of 71% of the capital at the price of 10,25 euros, of the reference Italian listed operator in the field of energy efficiency.
Ovs is down by 6,7%, to 3,07 euros, a new all-time low (-45% since the beginning of the year) in the wake of the financial difficulties of the subsidiary Sempione.
Aeffe -9%. Mediobanca has announced the cut to neutral from Outperform of the fashion group that owns, among others, the Alberta Ferretti and Moschino brands.
