In July 1997 the devaluation of the bath, Thailand's currency, uselessly countered by the rise in interest rates, was the fuse that ignited the Asian crisis, the first earthquake in the global economy. Yesterday, 22 years later, the decisions of the Central Bank of Bangkok regained the front page of the financial news: together with India and New Zealand, Thailand cut the cost of money yesterday, a move that today should be replicated by the Philippines, in awaiting the choices of the Australian Central Bank, which could join the downtrend next week. While waiting for the Fed and the ECB, the cuts in the cost of money in an anti-recession function started from the APAC, the Asia-Pacific area, which also in this way reaffirms the new balance of the economy. Now the spotlights are shifting to Japan: cornered by the run of the yen (not at all appreciated by the BoJ) which in one week fell to 106,20 against the dollar from 109,30.
It is not difficult to foresee that the Tsunami arriving from the East will find a prompt response in the West. The Eurozone, affected by the slowdown in the German economy and by the turbulence caused by the approaching Brexit, is already discounting the effect of negative rates. In the US, under growing pressure from the White House on the Fed, the markets are already pricing 30-year T bonds at 2,123%, a 3-year low. By now, securities with negative real yields (including the inflation rate) have reached the astronomical ceiling of 30 trillion dollars in the world, almost as if to replicate the greenhouse effect on the stock markets.
The real surprise, in this context, is the resilience of the stock markets: the drop in rates, which even signals a recession, continues to support an economy capable of withstanding the wounds on the front of duties and currencies. This is the positive note compared to the terrible days of '97.
Chinese stock exchanges are advancing. Csi 300 index +0,9% driven by trade data that is more positive than expected: exports +3,3%, the best figure since March, but imports are down (-5,6%).
The yuan appreciates, after hitting a nine-year low yesterday: the exchange rate drops to 7,044 from 7,065 yesterday. The Central Bank of China, determined to restore calm to the markets, set the reference value at 7,001 for today, higher than traders had expected (7,015).
The Japanese yen traded at 106,2 against the dollar, up slightly from 106,3 at the start of the session. In Asia, the Taiwan dollar, the Korean won, the Indonesian rupiah and the Malaysian ringgit strengthened.
The euro is little moved at 1,121.
Tokyo also rose (+0,7%). Futures on US Stock Exchanges are also positive (+0,2%).
Last night Wall Street recorded modest changes after a strong recovery over the last few hours: Dow Jones 0,08% (from -2,3% at the start), S&P +0,09%. NASDAQ +0,38%.
Worth noting is the plunge of Walt Disney (-4,9%) after the results. The markets fear the challenge launched against Netflix, which plans to drastically lower the costs of services (including sports).
This morning the fall of oil slows down after the intervention to protect prices by Saudi Arabia. Brent trades this morning at 57,63 dollars. Eni (-1,4%) and Saipem (-3,4%) down in Piazza Affari. In the last week Exxon and Shell have lost more than 7%.
Gold, the real winner of the summer, is holding above $1.500 this morning.
NEAR CRISIS, ONLY PIAZZA BUSINESS CLOSES IN RED
The European stock exchanges closed higher on Wednesday, after a zigzagging session: plus sign in the morning up to a maximum of 1,4% for the Eurostoxx index, then retreated (-0,3%) before a new correction upside down. To close the day, a last decline related to oil stocks. In the end the EuroStoxx stopped at +0,5% in line with the main lists. But there is one exception: Piazza Affari, held back by the market's response to Unicredit accounts but also by the rapid deterioration of the political situation. The Italian stock exchange closes the session down by 0,4% to 20.538 points after reaching a peak of 20.809 points
GERMANY, ACHTUNG! INDUSTRY IN RED
But the news of the stock markets takes a back seat, submerged by the race for bonds, which has also affected the markets of the Eurozone, which take robust interventions on the cost of money for granted, also in the light of the bad data on German industrial production, in June, down by 1,5% (against +0,4% expected):
NEW RECORD FOR THE BUND, BTP ON THE WHEEL
The 0,60-year bund hits a new all-time high at -0,54% from -XNUMX% yesterday.
The BTP also flies. The 1,38-year yield slips to 12% (minus XNUMX points) despite the fate of the executive is really hanging by a thread.
The gap between Btp and Bund rates stood at 199 basis points from 205 on the eve of the final session after a plunge to 198 points.
The extra long part of the curve was particularly strong: the 30-year BTP rate fell at the end to 2,42% from 2,56.
Globally, negative-rate bonds are now close to 15.000 billion dollars.
BANKS IN ALARM: UNICREDIT CUT ESTIMATE
The banks have been the cross and the delight of Piazza Affari.
Unicredit -5%. Together with Commerzbank and Abn Amro, the institute is one of the three European banks that yesterday revised their guidance downwards due to the impact of the decline in the interest margin, which fell to 2,55 billion euros, -2% year on year and -1% on the previous quarter. Operating profit at 4,51 billion, -5% on the year. Net profit rises by 81% to 1,85 billion euros thanks to the sale of Fineco but operating profit drops by 5%. The bank cut its 300 revenue forecast by €2019 million to €18,7 billion.
LESS SUFFERING, KEPLER AWARDS BANCO BPM
On the contrary, they shine the accounts of Banco Bpm (+4,72%), which closed the second quarter with 1,02 billion euros in revenues, down 20% year on year, slightly below analysts' estimates. The interest margin was slightly better than expected, amounting to 515 million euro (+2%). Net income rose to 443 million euros, from 151 million in the previous quarter. Exposure to non-performing loans drops to 9,7% from 10,5%. Kepler Cheuvreux raised the recommendation from reduce to hold.
Ubi Banca -0,7%: Cattolica and the French Cnp Assurances are about to present a binding offer for the insurance business. Bper Bank +2,3%.
Amplifon (+2,8%) and Recordati (+2%) performed well among the blue chips.
Ferrari +1,6%: Morgan Stanley has raised its target price from 160 to 175 dollars, confirming the overweight recommendation.
TOD'S, SALES FALL. DELLA VALLE: I INVEST
After a brilliant week, Tod's closed in the red, -1,2% pending the interim accounts announced after the markets closed. Consolidated turnover fell to 454,6 million (-4,7%). The pre-tax profit is negative for 6 million.
Diego Della Valle reassured the market: “My family and I will continue to invest. This is the time to invest without hesitation to obtain the necessary turnovers, which are certainly achievable. If we now sacrifice a few points of Ebitda in the short term, it is to favor profitability in the medium term".
Worth noting is the leap of Confinvest, the Italian leader as a market dealer of physical investment gold, which gains 6,5% on the wave of the growth in the metal's prices.
