Playtime is over. Yesterday the markets acknowledged that the government agreement of the yellow-green majority presents significant dangers not only for public finances but for the Bel Paese itself belonging to the area of the common currency. The draft of the agreement, later partially denied during the day, contains the proposal to cancel the 250 billion BTPs in the hands of the ECB (mostly through the Bank of Italy) at the end of the QE, and the request for a exit from the Euro. These are unattainable requests, but which have achieved a result: the reappearance of political risk on the European markets starting from the weakness of the euro, which has slipped to a minimum of 1,1763 against the dollar.
This morning, the single currency recovered some positions, and traded at 1,182, also thanks to the diffusion of a new draft which does not reveal any difficult issues for the markets. But there is not even the name of the Prime Minister, furthermore some details remain to be resolved, probably today will be an interlocutory day.
The Italian 2,10-year yield jumped to 1,94% from 151% yesterday. The differential with the Bund widened to 20 points, the highest since January, a full 1,95 basis points above Tuesday's close. The yield on the 2,12-year BTP also rose sharply, jumping from 1,95% to 5% from 0,95%. Even on the 0,78-year maturity, BTPs were hit by substantial sales, with the yield of the Italian lead bond on this maturity ending at XNUMX% from XNUMX%.
The collection of the Btp Italia has also slowed down noticeably: only 344 million on the last day of the offer to be added to the 3,723 billion of the first two days.
The Milan Stock Exchange also fell sharply: -2,32% to 23.734 points. However, the FtseMib's performance since the beginning of the year remains the best in Europe with +8,5%, in the same period the Eurostoxx index rose by a modest +1,7%.
JAPAN RECOVERY TOWING WALL STREET
Rising rates and dollar, return of tension on the Korea front, new progress in oil prices. Here are the elements that, beyond the resurgent Italy syndrome, characterize the financial landscape.
The Japanese Stock Exchange is recovering (+0,7%). The yen recovered some positions against the dollar, to 110,2.
China's stock markets are also down. Hong Kong -0,3%, CSI300 index of Shanghai and Shenzhen stock exchanges -0,3%. But the Internet giant Tencent takes off: +5,2% after the results.
Sydney's S&P ASX 200 index fell slightly after the unexpected rise in unemployment in Australia. The India Stock Exchange is closed.
MACY'S BOOMS, RUSSELL INDEX AT TOP
Sales of US Treasuries continue in the USA. The ten-year yield travels to the new high since 2011 at 3,108%, the two-year yield at 2,58%, the highest since 2007 and the thirty-year yield at 3,21%.
The rise in interest rates does not weigh on Wall Street: Dow Jones +0,25%, S&P 500 +0,81%, Nasdaq +0,63%. The Russell 2000 index, dedicated to US SMEs, has risen to a new all-time high.
On the list, the stocks of the trade led by Macy's shine, +10,8% after the accounts. Wal-Mart's results come in today.
OIL RISES, SAIPEM IN ORBIT
Oil closes higher at 71,49 dollars a barrel. US oil inventories are holding back more than expected after the record increase in exports, favored by the rise in prices. The International Energy Agency has revised downwards the estimate of world consumption growth to 1,4 million barrels (from 1,5 million) but the Venezuelan crisis and the probable embargo to the detriment of Iran.
In Piazza Affari, the oil companies escaped the rain of sales of the rest of the list.
Saipem goes into orbit, with an increase of 12,23% to 3,917 euros. Bernstein has raised the rating to 'outperform', with a new target price of 6,6 euros. The action is listed as one of the house's highest conviction buys. Analysts think the price could double
Tonica Tenaris (+1,84%), also driven by a report from Morgan Stanley which raised the target price to 24 euros, confirming the overweight recommendation.
BREXIT DEAL, STERLING SUPERSTAR
The situation on the other European price lists is much calmer than the Italian storm. The weakness of the euro against the dollar favored the resilience of the equity markets. The single currency also lost ground against the pound for the fourth consecutive day to 0,872. Yesterday evening the ministers of Theresa May's government reached an agreement on Brexit: the United Kingdom, as reported by the Telegraph, will communicate its intention to remain in the European customs union starting from 2021 in the next few hours.
The markets of Frankfurt (+0,19%), Paris (+0,27%) and London (+0,26%) rose slightly. Only Madrid loses 0,95%.
Meanwhile, Europe is proceeding on a very different trajectory. Angela Merkel, in a speech to Parliament, spoke to all Europeans, warning that ECB aid is about to end: it is therefore necessary to strengthen ourselves, increasing the level of integration. The message comes a few days before the European summit on 28 June.
BANKS UNDER FIRE, VITTORIA INSURANCE FLIES
Banks have paid the most for the rising political fever. The basket of Italian institutions left 3,68% on the ground. Particularly weak are Banco Bpm (-5,37%), Unicredit (-4,72%) and Mediobanca (-4%).
Asset management was also significantly down: Fineco Bank lost 5,47%.
In the insurance sector, Vittoria Assicurazioni stands out (+19,7%) after the announcement of a takeover bid by the reference shareholder, the Acutis family. Unipol purchased shares of the insurance company UnipolSai -1,54% equal to 0,71% of the capital 43 million the total outlay).
MEDIASET AND UTILITIES SUFFER. TODAY TIM
Strong sales on Mediaset, which lost 5,28%. Tim lost 4,09% on the eve of the approval of the quarterly results.
Public utility companies are also down, which could be targeted by the government that is being formed. Enel -3,8%, Snam -3,5%, A2A -3%. Atlantia-3,2%.
ASTALDI, DISPOSAL, INCREASE AND A JAPANESE SHAREHOLDER
Astaldi dropped 4,47%, at 2,608 euro, after reaching a high for the day at 2,894 euro before reversing course in line with the strong weakness of the market. The society announced yesterday the new strategic plan to 2022, a capital increase of up to 300 million euros and the strategic agreement with the Japanese group IHI Corporation, which will participate in the recapitalization. The sale, still to be defined, of the third bridge over the Bosphorus is also planned. The plan envisages a maneuver worth over 2 billion euros which represents a wide-ranging review of the group's capital and financial structure.
Among the companies that published their quarterly reports on Tuesday evening with the Stock Exchange closed, Il Sole 24 Ore did well (+3,95%); heavy Retelit (-8,17%) and Geox (-6,03%).
