The trade war between China and the USA casts a sinister light on the start of the financial week. Stock markets and currencies reflect the worries of the markets awaiting new American measures and the inevitable retaliation from Beijing.
The Asian stock markets open in the red, starting from the Chinese markets: the CSI 300 index of the Shanghai and Shenzen stock markets is down by 1,1%. Taipei -1%. The markets of South Korea -1% and Australia -0,4% were also down on the eve of the elections.
THE THUD OF UBER CRUSHES SOFTBANK IN TOKYO
Forgiveness to Tokyo both the index Topix -0,2% that the Nikkei -0,4%. The giant Softbank, a major shareholder of Uber, falls by 5% after the weak debut (-8%) on Wall Street of the anti-taxi freshman.
It strengthens it yen Japan, the safe haven asset in times of market stress: the cross is at 109,8, a level not seen since February.
Conversely, the Chinese yuan lost ground -0,6% to its lowest level since January. The won, the currency of South Korea, is at its lowest level in the last two and a half years against the dollar, cross at 1.184.
In Indonesia, the stock market falls and the currency devalues: -1,1% for the former, on the lows of the last 8 months for the latter.
REFUGE GOODS: VIRTUAL CURRENCIES BETTER THAN GOLD
Index futures are weak S&P, a red opening is looming for the European markets.
Brent oil is holding its positions, this morning the future is trading at 70,8 dollars a barrel, up 0,3%, last week it closed down slightly.
THEgold it gained 0,5% last week, down slightly this morning to $1.283 an ounce.
Come back to shine, in times of trade wars, the Bitcoin. The virtual currency, up 90% since the beginning of 2019, this morning broke the $7.000 barrier to $7.585.
TRUMP AND XI WILL MEET AGAIN IN JAPAN
It is "very probable" that Donald Trump will meet Chinese President Xi on the occasion of the G20 meeting at the end of June in Japan. Until then, said White House economic adviser Larry Kudlow, there should be no official meeting between the two Bigs after the breakdown of negotiations and the increase in tariffs decided by Washington. The Stock Exchanges are adapting to the new climate: an agreement is unlikely, given the distance between the parties.
Washington accuses Beijing of having backed down, China denies it and, on the contrary, points out that it will never give in on questions of principle (see, for example, support for state-owned companies). And Trump increases the dose: the Chinese, he says, are hoping for a democratic victory in 2020 "in order to continue to screw us over, but they would do well to sign". For now, in short, there is aescalation of the conflict: Trump to sign off on tariff hikes on hitherto exempt Chinese goods this week. Meanwhile, another alarm is looming: next Saturday, in fact, the terms of Trump's ultimatum on European cars will expire.
DUTIES ON EUROPEAN CARS CLOSER
The tariff game thus promises to have big effects on the Eurozone as well two weeks into the electoral contest. The distance between the two sides of the Atlantic has never been so wide. US Secretary of State Mike Pompeo has canceled his visit to Berlin, meanwhile Trump is preparing to receive Viktor Urban, the Hungarian president, a point of reference for European sovereignists: The data on German GDP for the first quarter due out this week thus take on a particular flavor as well as the Zew Business Confidence Index. Friday will be the turn ofEuropean inflation.
The confrontation between the two superpowers monopolizes the attention of the markets, leaving little room for other appointments, from the summit of EU finance ministers to the Opec bulletin pending the summit of the cartel.
INFLATION BEING REVIEWED BY THE FED
Interim week for central banksIn the USA, the debate on inflation is heating up starting from the possibility of changing the targets set by the authorities. Great attention will be devoted to data on consumer sales and industrial production. Several Fed governors will intervene during the week: Eric Rosengren (Boston) and Vice President Richard Clarida, in favor of interest rate easing operations, together with Esther George, who is much more rigid.
THE BAGS START AGAIN AFTER A BLACK WEEK
At the center of the markets' attention will be the corporate data arriving in a market that is respecting tradition: May is a month in which sales prevail on the stock exchange: Business Square recorded the worst week since October 2018: -4,1% is the negative change from last Friday to this Friday. The MSCI World index closed last week down 2,7%, after six strong weeks.
A2A SHAREHOLDERS' MEETING, ACCOUNTS FOR ITALGAS AND PRYSMIAN
Today the veil will be lifted on the quarterly accounts of a large group of companies including Iren, Italgas, Prysmian and Saras. To follow the shareholders' meeting of A2A and Pininfarina.
UNICREDIT AND FINECO UNDER EXAMINATION
Spotlights on the price list on Unicredit which announced the sale of 17% of Finecobank on Friday evening. As a consequence of this transfer, Unicredit announces that Fineco is no longer part of the perimeter of the group. The bank in Piazza Gae Aulenti now holds a minority stake in Fineco of approximately 18% and will proceed to deconsolidate Fineco from its balance sheet.
PEACE (PROVISIONAL) FOR DEL VECCHIO IN PARIS
Momentary brightening in the conflict that separates Essilor's partners-Luxottica. The contenders have shelved for the moment the vetoes that have blocked the activity of Francesco Milleri, the trusted man of Leonardo Del Vecchio, and of the transalpine managers. The parties have agreed on an armistice in view of the meeting. Both parties are against the appointment of new boards with a greater presence of independents, as requested by various shareholders' associations.
On the other markets to follow:
in the US the quarterly of Walmart and of the other big names in commerce, including Macy's, but also the sales of Ralph Lauren.
In China, the accounts of the e-commerce giants Alibaba and Tencent are appearing. The Hong Kong authorities have granted the two groups a license to operate in banking services.
The numbers of Easy Jet are highlighted at the City.
