"It is our intention to keep the exchange rate of the yuan stable." This morning the deputy governor of China's central bank, yi gang, held a surprise press conference (an almost unique event) to calm the markets after the new currency devaluation. “Speculations about our alleged intention to push the yuan down by 10 percent are groundless".
The banker's words curbed the Chinese currency's further decline: the renmimbi lost only 0,33%, after having slipped by 1% during the session. The yuan also recovered on the Hong Kong market. Also the currencies of the area improved, after the sharp falls: the Korean won +1,6%, the Singapore dollar +0,5%, the Malaysian ringgit +0,9%.
Asian stock markets also recovered, Tokyo gaining 0,4%, Sydney 0,6%. Hong Kong +0,2%. Shanghai and Shenzhen are also on positive ground +0,3%.
RECOVER APPLE, DOWN ALIBABA
The positive reaction had begun on Wall Street: in the last hour of trading, US stocks recovered most of the day's heavy losses. The Dow Jones closed at -0,33% after recovering 300 points from its lows. In positive ground S&P +0,1% which during the day had fallen below the levels of the beginning of the year. NASDAQ +0,15%. The recovery is linked to the Apple rebound +1,5% (against the initial -3%) and the +1,9% rally in the energy sector, recovering after the lows of crude oil linked to the fall in the renmimbi.
On the heavy corporate front Alibaba fall -5,1%: the results show the slowdown in Chinese online purchases. Yahoo also down -4,3% shareholder of the portal.
BUT THE CHINESE STRATEGY REMAINS A REBUS
“I own a crystal ball. Unfortunately, however, it is a Chinese brand. So I don't know how reliable it is." So a foreign exchange trader waiting for the Beijing fixing at 9:6,4010 (Chinese time) which preceded the central bank's press conference by an hour. This morning the parity was set at XNUMX against the dollar, or about 1% less than on the eve. But the market, following indications from the People's Bank of China, limited sales. However, uncertainty remains high. Yi Gang argued that the exchange rate is now close to normal levels. But the mood of the market, worried by the slowdown of the second largest economy on the planet, is oriented towards further declines.
EUROPE UNDER FIRE. AND BERLIN STOPS THE GREEK PEACE
The words coming from Beijing, in addition to the recovery of Wall Street should encourage the recovery of the European Stock Exchanges after yesterday's dramatic fall. Under the pressure of the Chinese devaluation, Frankfurt lost 3,3%, Paris 3,4%. In Milan, the Ftse Mib index closed down by 3%.
The bond markets are also under severe tension. The Bund rebounded on the back of the rise in US Treasuries, a traditional safe haven in times of tension. The spread rose again in the afternoon to 120 basis points. The correction spared shorter maturities: yesterday morning 12-month BOTs were assigned at 0,011%, an all-time low.
Tension is also rising in view of the Eurogroup summit which should give the green light tomorrow to the agreement between Athens and the creditors on the aid package. The brakes are Germany, which has sent its partners a critical document, in which clarifications are requested on the voluminous dossier (400 pages) finalized in the negotiations. The biggest stumbling block, however, is the absence of the IMF from the next aid plan: Angela Merkel fears that, given the situation, the Bundestag will say no to the agreement.
FIAT CHRYSLER BURNS AUGUST EARNINGS. BITTER RUPEE FOR PIAGGIO
The European car sector was, together with luxury, the hardest hit by the torpedoes arriving from Beijing. The sector index dropped 4% (after -3% yesterday) reaching its lowest level since mid-January. He paid for it too Fiat Chrysler down 6,5% to 13,76 euros, which thus canceled the gains accumulated since the beginning of August.
Of the major automakers, FCA is the least exposed to China where it generates only 6% of turnover, 4% of Ebit and only 3% of tax profit. The group's exposure in China is essentially linked to Maserati, Ferrari and the prospects of Jeep.
Much more significant is the weight of the Chinese market for Volkswagen -3,5% and Peugeot -4% which, compared with an exposure of 7% of turnover in China, generates 21% of Ebit and 38% of profit pre-tax in the country of the Great Wall. The component groups are also under pressure. ?Sogefi loses 6%, Brembo -4,2%. Pirelli shares are unchanged at 15,04, in line with the price of the next takeover bid by ChemChina, which yesterday became Bicocca's reference shareholder.
Piaggio -6,5%. The stock is penalized by the earthquake that is affecting all currencies in the Asia-Pacific area, where in the first half of 2015 the group generated around 260 million euros in turnover, equal to over a third of total revenues (693 million euros). . In India alone, Piaggio has generated around 170 million euros in revenues and at the moment the Indian rupee is trading at its lowest since September 2013 against the US dollar and at its lowest since mid-June against the Euro. Among the other heavy industrial stocks, falls for Prysmian -5,14%, Buzzi 4,24%, Finmeccanica 4,54% and Cnh Industrial 3,96%.
LUXURY, THE DISCOUNTS IMPOSED BY BEIJING DON'T STOP
Luxury has also been the target of strong sales. The European sector index is down by 4,4%. In Paris, LVMH leaves 5,5% on the ground. ???In Milan, above all the companies most exposed to China were sold: Luxottica -5% (the group's Chinese turnover is more than 630 million), Ferragamo -4,9% (about a third of the maison's sales are directed to the Chinese market) and Yoox -4,3%. Moncler -4% and Tod's -3% also down.
MPS UNDER FIRE, BUT NOMURA'S WEIGHT IS REDUCED
Credit securities are down sharply. The bill plus jump pays it Monte Paschi -4,8%. The bank announced that the pro-forma exposure to Nomura has fallen to 24,33%, below the 25% percentage imposed by the ECB. In the rest of the sector Unicredit -3%, Pop. Milan -3%, Entente -3,12%.
SARAS REMAINS IN AGAINST THE TREND
Down Eni -2,3% which today should benefit from the final rally of Energy stocks on Wall Street. Meanwhile, the rise of Saras continues + 2,06 %.
