Rates down, but without exaggerating. It is the Fed's message that puts a brake on the expectations of the markets, already convinced that a robust cut, at least by half a point, was now imminent. On the contrary, at the next meeting of the Central Bank on July 25, the reduction (if any) will not go beyond 0,25%, as James Bullard, the Fed's dovish leader, anticipated to Bloomberg.
POWELL CLAIMS THE AUTONOMY OF THE BANK
President Jay Powell, while emphasizing that the economic situation has worsened and that there will be no talk of rate hikes for a long time, dedicated a good part of his speech to reiterating that the Fed "is completely deaf to the short-term pressures coming from 'external', in response to pressure from Donald Trump. A small cold shower that overturned the moods and trends of price lists.
DOLLAR RISES, GOLD FLAWS
Asian stock markets slow down, all in pale red, with losses of around 0,1-0,2%, from Shanghai to the Korean Kospi and Sydney.
The decline in Tokyo was heavier (-0,6%) despite the slowdown of the yen (-0,2%) against the dollar.
The Fed's message has in fact arrested the descent from the US currency. The euro fell from the peaks above 1,14 of the last sessions and traded this morning at 1,1353.
Gold also loses ground, after six consecutive upward sessions: the yellow metal trades at 1.413 dollars an ounce, down 1,2% from its highs, but still up 10% from May. The outcome of the G20 which will open on Friday in Osaka will determine the future course.
In anticipation of the summit, the US markets are slowing down, disappointed by the words of the central bankers: the Dow Jones loses 0,67%, the S&P index down 0,95%. The decline in the Nasdaq was heavy (-1,5%).
FIREWORKS ON BOTOX (+31%)
Among the most distressed stocks, Microsoft dropped 3,1% and was the Dow Jones' worst blue chip.
The negative mood can be explained by signs of a slowdown in the real economy which contrast with the optimism of the president, not surprisingly lined up for the full-throttle expansion of economic stimuli: American consumer confidence, measured by the Conference Board for the month of June, it dropped surprisingly to 121,5 points from 131,3 in May. The figure is below expectations (131), the lowest level since 2017. The sales of new homes are also disappointing (626 against 673 in the previous quarter). The trade war weighs more than expected, analysts say.
Allergan, a pharmaceutical company specializing in the production of Botox, is sparking, up 31%. The pharmaceutical company AbbVie (-10%) has made an offer to buy Allergan for the total amount of 63 billion dollars with a premium of 45% compared to the closing price on June 24th.
Crude inventories in the United States decreased by 7,5 million barrels. Notably, inventories at the U.S. delivery center in Cushing, Oklahoma were down 1,3 million barrels. WTI crude advanced 2% to 59 dollars a barrel.
FLY THE BITCOIN PUSHED BY FACEBOOK
The recovery of Bitcoin continues, this morning over 13 thousand dollars. The announcement of Libra, Facebook's virtual currency, is favoring the relaunch of the sector, despite requests from the US and British supervisory authorities who have anticipated a strict examination before the green light for "Libra".
The indications coming from the Fed are destined to affect the performance of European stock markets, yesterday dominated by the race of the Bund, the safe haven par excellence in Europe, pending a rate cut that will probably still have to wait. Yesterday the 0,33-year yield recorded a new all-time low of -XNUMX%. European stock futures are set to open lower.
MILAN -0,73% DESPITE THE YES TO THE OLYMPICS
Despite the Olympics effect, Piazza Affari (-0,73% at 21.128 points) was the worst stock exchange.
The other price lists were also weak: Paris unchanged, Frankfurt -0,2% Madrid -0,36%. The announcement of the multi-billion dollar merger between two of the major European consultancy firms, Capgemini and the smaller Altran, an operation worth 3,6 billion euro, helped to contain the decline.
THE SPECTRUM OF THE EARLY VOTE ON LONDON
London +0,08%. The Brexit dossier is increasingly tangled. Boris Johnson reiterates that the United Kingdom will leave the EU on October 31, even in the absence of agreements. But Labor has already made it clear they will be calling for a no-confidence motion on July 25. A government crisis is not excluded given that 10/12 conservative members will vote with the opposition in the event of a no-deal exit: early elections are looming.
The Italian paper archives the session of the bond markets around parity, however underperforming the rest of the euro zone sector with the exception of Greece.
CTZ, AUCTION OK. TODAY THE AUCTION BOT
At the end of the day the spread was equal to 249 basis points (after a peak of 254) from 248 at the start and from 247 on the eve.
The reference ten-year yield is unchanged at 2,16%.
In view of today's 6-month Treasury auction (6 billion euro offered), the Bond rate of 31 December 2019 is between -0,07% and -0,08%, up from the -0,048% of the placement at the end of May .
Yesterday the Treasury placed the maximum amount offered of 3,25 billion euros in the Ctz and BtpEi auction with the Ctz rate at its lowest since March at -0,431% from 0,818% at the end of May. This is the lowest level since last March.
RENOVATION FLIES, SALINI ALSO UPWARDS
Olympics but not only. The construction and real estate sectors guarantee one of the few glimpses of liveliness in the market conditioned by the bitter conflicts within the government.
The uncertainty surrounding Atlantia is exemplary, practically immobile yesterday due to the effect of opposing pressures: the company risks withdrawing the concession as requested by the 5 Star Movement but the opposition of the League which, among other things, is betting on the company of the Benettons for the rescue of Alitalia.
Salini Impregilo (+1,5%) reduces the initial increases triggered by the declarations of the general manager Massimo Ferrari who foresees the launch of the national construction pole for the beginning of July. Enthusiasm fades in the finale and shares close well below the highs, in a market that is thinking about a possible capital increase and in general about the steps needed to reduce debt.
The rise of Buzzi Unicem (+1,44%) after the initial leap on the wave of the Olympics is reduced. Aedes Restart real estate also did well (+6,62%).
At the top of the Risanamento list (+8,82%). Near the Santa Giulia district, owned by the company, Palaitalia will be built for the hockey competitions of the Games.
PATUELLI: BANKS WILL SELL BTPs
The low interest rate scenario is keeping bankers subdued. “From January – foresees the president of the ABI Antonio Patuelli – it is very probable that the total of Italian government bonds will drop significantly”, because the banks will have to start repaying the ECB loans. The entire sector was down: Banco Bpm -0,25%, Intesa Sanpaolo -0,34%, Unicredit -1,74%, Ubi -1,83%, Bper -2,29%.
Sales on Telecom Italia after the confirmation of the talks for the creation of the single telephone network last week, no concrete indications on the possible operation followed. The spread between ordinary and savings narrows to 2,3 cents, after last Friday's detachment.
