It will be a busy week for central bankers. Between Tuesday and Wednesday the Fed, the Bank of Japan and the Bank of England will meet, the latter meeting tinged with yellow because there are rumors of the resignation of Governor Mark Carney, the target of attacks by Brexit supporters. But, anticipates the Financial Times, Carney will remain in his place. And yet, despite the weight of the central banks' choices, the markets' attention will be focused on another dossier: the race for the White House, which, just over a week after the November 8 vote, is tinged with uncertainty after the FBI's decision to reopen the case of Hillary Clinton's "clandestine" emails.
It is not at all clear what impact the "November surprise" might have on the chances of the Democratic candidate or on her party, which also aspires to victory in the congressional elections. Certainly, the novelty introduced a note of uncertainty immediately registered by Wall Street, down on Friday evening despite the rise in GDP in the third quarter (+2,9% against the previous 1,4%). Even more significant were the purchases of T-bonds, which rose to 1,85% (+ points) after a week of rainy sales: traders fear a Trump victory will force the Fed to abandon the rate hike in December.
At this point, it is not difficult to foresee a week marked by uncertainty, even more on the front of currencies and debt securities than on share prices. But the recovery air confirmed by the quarterly reports both in the USA and in Europe plays in favor of the markets. Meteo Borsa, however, advises caution.
ASIA WEAK DOWN THE MEXICAN PESO
Opening negative ground for Asian stock markets, in the wake of the nervousness of the US Stock Exchanges after the news of the new investigations into Hillary's staff. In the red Tokyo (-0,4%) and Shanghai (-0,3%). Conversely, Hong Kong increased (+0,4%). Sideny +1% on the eve of tomorrow's Australian central bank meeting.
The Mexican peso, the currency of the country that risks the most in the event of Trump's affirmation, is also losing blows. Oil is weak: Brent below 50 dollars at 49,35 a barrel, Wti at 48,48 dollars. The meeting of representatives of non-OPEC producers (including Russia, Brazil and Kazakhstan) ended with a general hope for a general agreement: first we want to understand if Opec will be able to bend the resistance of Iraq and Iran, opposed to a cutting their production.
GE-BAKER HUGHES AGREEMENT: A 30 BILLION GROUP AT THE START
Big hit on the weekend of General Electric. According to the Wall Street Journal, the giant will announce today the merger of its oil and gas businesses with those of Baker Hughes. This will create a $30 billion company controlled by Ge.
THE FED BOARD WILL TAKE TIME AWAITING THE US VOTE
Market attention is already focused on tomorrow's press conference by BoJ Governor Haruhiko Kuroda, following the conclusion of the Central Bank board. Janet Yellen's press conference on Wednesday 2, after the penultimate 2016 meeting of the Federal Reserve's monetary committee, is not scheduled. Also for this reason it is taken for granted (83 to 17 forecasts) that it will not be the meeting in which the first (and only) rate increase this year will be decided. If anything, the summit will serve to convey the Central Bank's intentions to the markets after the long confrontation between hawks and doves in recent months.
No less important, in this light, are the October labor market data which will be announced on Friday: 175 new jobs are expected (156 in September) and a drop in unemployment to 4,9%. An increase in wages is also expected: +0,6% .
But the attention of the board will be directed to the next electoral challenge. A victory by Donald Trump would have the effect of an earthquake on the Central Bank. And not just because the Republican candidate makes no secret of wanting to replace Janet Yellen as soon as possible in case of victory. Indeed, Trump promises a very aggressive fiscal policy that could force the Fed not to move the rate lever before having new elements available.
DEBT MARKETS UNDER PRESSURE
The note of uncertainty caught the markets by surprise, which were already adapting, almost everywhere, to a new paradigm, perhaps, at least temporarily, once again under discussion. Global bonds sold off sharply last week, pushing the Bloomberg Global Aggregate Index down 2,9%, a decline not seen since May 2013 when Ben Bernanke signaled the beginning of the end of US QE . The good data from the US economy, the recovery of German prices and the rebound of British gilts have triggered a general rise in yields which has affected Eurozone securities (including BTPs). The October XNUMX-year Bund could record a third consecutive month of rising yields, an event that had previously only occurred in the spring of last year.
Beyond the effects of the US vote, the new trend will have to face the first exam: the trend of inflation in October. The flash survey is foreseen for the Eurozone and the Italian preliminary data. The data on GDP growth in the euro area in the third quarter is also of great importance: it is forecast at +0,3%, in line with the forecast of +1,6% on an annual basis. The Economic Bulletin of the ECB will be published on Thursday.
IN THE SIGHT THE BTP, WAITING FOR THE REFERENDUM
The upward trend in yields coincides with a very delicate phase for public finances in the Bel Paese, conditioned by the start of the financial procedure and, much more, by the forthcoming referendum. On 2 November, the Budget commission will start verifying the content of the budget bill, then it will be the turn of the hearings, while the related tax law decree is also traveling in parallel.
The general upward trend in yields, which is also accompanied by the expectation of an imminent reduction in the purchases of European Qe, may increase the difficulties of the Italian accounts: the spread against the Spanish Bonos, driven by the prospect of forming a new government, rose to a high of 43 basis points.
RAIN OF QUARTERLY REPORTS WAITING FOR ITALGAS
Week full of exams for the blue chips of Piazza Affari. We start this morning with the accounts of Cnh Industrial. Thursday 3 will be the turn of Leonardo Finmeccanica and Tenaris. Friday will be the turn of Intesa San Paolo, Telecom Italia and Terna. Italgas will return to Piazza Affari on Monday 7 November after the split with Snam. The Ftse Mib index will provisionally consist of 41 stocks instead of the usual 40.
The European agenda is also very busy: the accounts of Crédit Suisse, Commerbank, Société Générale and Ing will give. BMW stands out in the industry. On Wall Street, in addition to Facebook, there is great interest in the accounts of TimeWarner, potential prey for AT&T.
FIATCHRYSLER ON THE TOP, BLACK JERSEY FOR SAIPEM
For once, it is not bank stocks that characterize the performance of the index, which has achieved a rise of 0,8% (fourth consecutive week up). Fiat Chrysler (+13,81%) stood out on the wave of the excellent quarterly performance, just ahead of Stm (+13,78%). Followed by Luxottica (+8,14%), Brembo (+6,07%) and, first among the financial companies, Unipol (+5,45%).
Black shirt of the week was Saipem (-11,53%) after the surprise write-downs in the quarterly report. Followed by Yoox (which will give the accounts in the next eighth, -6,82%), Campari (-3,57%) and Recordati (-3,03%).
It limited Monte Paschi's weekly loss to -2,96%, which also recorded thrilling swings in the week of the approval of the industrial plan. Marco Morelli is about to kick off the tour to gather adhesions to the art project of some "anchor investor": a stop is also planned in Doha at the headquarters of the Qatar Investment Authority. .
