The Chinese stock exchanges are ready to celebrate the agreement between Beijing and Washington, even if the negotiations have just resumed with the arrival in the US of Liu He, the right-hand man of Xi Jing Ping. The Csi 300 index of Shanghai marks time this morning, but remains at its highs: since the beginning of January the gain is 16% and infects the other Asian markets, from Hong Kong to Tokyo, which is adapting to the expansive climate promoted by all central banks.
JAPAN ALSO PREPARES NEW LIQUIDITY
This morning the governor of the Bank of Japan, responding to a parliamentary question, said that the institute is ready to use any instrument, including the injection of new liquidity, to prevent the revaluation of the yen against the dollar. The Japanese currency thus fell to 110,49 from its weekend peaks (111,13).
The US currency moved little against the Euro (1,129). Euro-pound cross at 0,875, +0,1%.
In the absence of Wall Street, which was halted for the holidays, the bull run continued on the Eastern and Emerging markets, supported by the prospect of an agreement on tariffs and even more so by the bet on a more expansive US monetary policy.
Gold also participates in the party, having jumped to the highest levels (1.327 dollars an ounce) while waiting for interventions by the central banks. And oil also remains at sustained values: 66,10 dollars a barrel for Brent, close to the highs of mid-November. The energy values benefit from this. Eni +0,6%: SocGen, Kepler and Berenberg have all raised their target confirming the buy rating. Saipem +1,5%, to new highs since November. Banca Akros confirmed the Buy with a target of 6,4 euros.
HONDA LEAVES THE UNITED KINGDOM, FIVE STARS PRO SALVINI
In this framework, Europe ends up representing the area most at risk. The markets are holding, supported by the expectation of the ECB's action, but the situations at risk are multiplying. The risk of the possible consequences of a hard Brexit is growing, underlined by Honda's decision to close the plant in the UK. It is now taken for granted that Donald Trump, once the dispute with Beijing is closed, will unleash his offensive against European cars, starting a battle over tariffs which, the Chinese experience teaches, risks seriously damaging price lists.
Italy, as the undersecretary anticipated Giancarlo Giorgetti, is starting a corrective maneuver (we are talking about 9 billion) already taken into account even before the Fitch verdict. On the political front the no of the 5 stars in the Matteo Salvini trial save the government for now, but the vote (moreover very unreliable) on the Rousseau platform reveals the split in the Movement on the issue.
BUSINESS PLACE +0,58%, HIGHEST SINCE OCTOBER
But the clouds didn't spoil the stable calm of the European markets, at their highest since the beginning of November, thanks above all to the push from Milan, which confirms itself as the most brilliant list. The FtseMib index (+0,58%) reached new highs since mid-October at 20.348 points during the day, extending last week's progress, the best in 22 months (+4,5%). From the beginning of the year +10,50%.
Paris (+0,3%) and Madrid (+0,35%) also rose; flat Frankfurt, the most exposed to US retaliation on car imports. The Bundesbank said that German growth is likely to remain weak for at least the first half of 2019, due to the impact on investment of the deteriorating macro picture.
London loses (-0,26%), while Brexit also tears apart the Labor party, with seven deputies announcing a farewell for Jeremy Corbyn's support for the process of exiting the European Union. Honda has announced it will close its Swindon plant, the Japanese automaker's only manufacturing site in the EU that produces the Honda Civic model. Honda is the latest in chronological order to leave the UK. As Panasonic and Sony have agreed to move operations to Amsterdam, Nissan has announced plans to cancel plans to manufacture SUVs in Sunderland despite assurances from the UK government.
Returning to Italy, the undersecretary to the presidency of the Lega council, Giancarlo Giorgetti, said that the government will verify "in the coming months" whether a corrective maneuver is needed to meet the deficit and debt targets agreed with the European Commission.
PRAET: ON THE OTHER DECISION AT THE BEGINNING OF MARCH
The markets are focused on confirmations that new ECB Tlter loans are on the way. After the announcement by Benoit Coeuré and the words of other European central bankers, yesterday it was Peter Praet's turn. The ECB's chief economist, soon to be replaced by Irishman Philip Lane, said the central bank would make an assessment of credit conditions at its March council meeting, when new quarterly staff estimates on growth and inflation will be presented.
Against this backdrop, the secondary market experienced a positive session but with modest volumes due to the absence of US investors.
THE SPREAD DOWN TO 266. A NEW XNUMX YEAR IS COMING
From 268 basis points at the start, the spread between BTPs and Bunds on the ten-year segment fell to 266. The ten-year yield fell to 2,77%.
France took advantage of the favorable demand situation, announcing in mid-session the issue of a new benchmark in May 2050, ie a 'long' thirty-year term, to be placed through a banking syndicate.
Even net of this operation, the week was very busy: the Unicredit research office calculates a gross offer for the eurozone of between 20 and 23,5 billion, against maturing securities for 16 billion of German paper, as well as 500 million coupons from Austria, Germany and Ireland.
EVEN CYPRUS RETURNS TO THE MARKETS
Cyprus is also moving, announcing an issue with a 15-year maturity.
Friday evening with the market closed, with the press release on the medium and long-term auctions at the end of the month, the Treasury should announce, according to Reuters, a new ten-year BTP, in line with the quarterly issuance plan.
Also on Friday, however, the update of the Italy rating by Fitch (today BBB) will be communicated.
The attitude of the ECB is also at the origin of the rally in Piazza Affari in the banking sector, which rose by 1,71%. Since the beginning of the year, the increase is 10% against +7% for the European index. In addition to the effect of the new loan refinancing, the general exceeding of the minimum capital parameters (CET1 ratio SREP) required by the European Central Bank of Italian banks in the last test in mid-February also benefits.
ITALIAN BANKS IN THE RALLY: +10% SINCE THE BEGINNING OF THE YEAR
The best stock was Ubi Banca (+3,9%). The institute launched a covered bond maturing on 25 September 2025 for 500 million euro. Orders exceeded 2,7 billion.
Unicredit also did well (+3,15%): Goldman Sachs raised its target to 18,20 euros (Buy).
Intesa San Paolo +0,88%. In contrast, Bper lost 0,4%. Last week the institute announced the purchase of Unipol Banca and the stake of the Banco di Sardegna Foundation in the Sardinian institute of the same name. FinecoBank +1,5%, marks new highs since October.
PURCHASES ON TIM CONTINUE
Another great protagonist of the session is Tim (+3,19%). Yesterday, Deputy Prime Minister Luigi di Maio said that the government is in favor of creating a single network, as long as the project is carried out through a market operation.
Mediaset also advances (+3,34%): for brokers the extension is linked to the constant purchases of Fininvest and the renewed merger rumors with Mediaset Espana
The auto sector was negative, in the wake of weak data on sales in China and fears of tariffs on European imports in the USA. Brembo (-1,27%) is the worst of the main list ahead of Pirelli (-0,99%). FCA -0,17%.
CAR BRAKING, JUVENTUS ACCELERATE AGAIN
On the other hand, Juventus' race (+2,54%) in anticipation of the Champions League does not know any obstacles or stops.
In the rest of the price list, the surge of Elica (+10,48%) and Geox (+5%) should be noted.
In the red Gima TT (-4,72%): Mediobanca Securities lowered the target price to 8,3 euro from 10,3, leaving the rating neutral.
THE DAILY EVENT TOWARDS AIM
Il Fatto Quotidiano has formally launched the procedure for requesting listing on the Aim. The 25,7% represented by treasury shares will be put up for sale. The proceeds will be used to support "the digital and data-driven development strategy, the diversification of the portfolio into television production and the development of the content platform for the Loft web TV".
