En marche! There clear affirmation, albeit widely expected, by Emmanuel Macron gave wings to the euro, which already jumped yesterday evening beyond 1,1024 against the dollar, to the highest in six months and to 124,85 against the yen. Together with the positive trend of the US labor market (211 new jobs in April), the news from Paris favored the brilliant start of the Tokyo Stock Exchange (+1,7%, +2,2% for the Topix) after the long holiday of the Golden Week. Future Europeans are on the rise, but not too much, and are already looking to the next legislative elections to assess the effective strength of the new president. The euro is also cooling down but optimism continues to prevail: the pro-European and liberal turn of the new president is appreciated. But, above all, the markets appreciate the stop to the populist avalanche.
The analysts' comments, however, already look further. “We need to understand – writes Julien Lafargue – how the ECB will move in June: the lower political risk, combined with the strong recovery of the economy, brings the exit from the extremely expansive policy of recent months closer”. Fidelity and Crédit Suisse expect a strong shift of capital from Wall Street to the European stock exchanges. Abn Amro experts predict a rebound in Bund yields up to 0,50% but warn that "it is very unlikely that spreads can drop significantly: operators are already tuned in to the most demanding political test: the Italian elections".
OPEC CONFIRMS CUTS. MERKEL WINS IN SCHLESWIG HOLSTEIN
“I am convinced that the production agreement will be renewed for the whole of 2017”. So said Saudi Energy Minister Khalid al Faleh yesterday in view of the OPEC conference at the end of the month and contacts with Russia. Crude oil prices, after a difficult week (Brent -4,4%) recovered this morning. But the market is weighed down by fears of falling demand from China, confirmed by April's trade balance data. This morning Brent, on the rise, returns to touch 50 dollars a barrel (at 49.76).
Not just Paris. The European electoral panorama yesterday was also enlivened by the triumph of Angela Merkel in Schleswig Holstein, the northern German region. The party of the Chancellor, the CDU-CSU, has won the confrontation with the challenger Social Democrat Martin Schulz. Voting will take place next Sunday in North-Rhine Westphalia, governed by the Social Democrat Hannelore Kraft: the game is still open, with the polls indicating a head-to-head between the two main parties.
ON THE AGENDA: THE G7 IN ITALY, INFLATION AND US CONSUMPTION
During the economic and financial week, all eyes should be focused on the G7 meeting of finance ministers and central bank governors which will take place in Bari from Thursday to Saturday. It will be an opportunity to discuss growth, employment and inequalities, as said by Economy Minister Pier Carlo Padoan.
Inflation and consumption are the most awaited macro data for the US economy this week. On the corporate front, the accounts of the most important traditional trade groups, bent by Amazon's competition, will be examined by Wall Street. The quarterlies of Nordstrom, Macy's and Kohl's will be out. Also in the limelight are the accounts of Walt Disney, 21st Century Fox and Whole Foods.
WARREN BUFFETT: I WAS WRONG TO UNDERESTIMATE TECHNOLOGY
Great attention has also been paid to the speeches of some central bankers, members of the FOMC, the monetary committee that votes on interest rates. Bill Dudley, president of the New York Fed, Charles Evans from Chicago, Robert Kaplan from Dallas and Patrick Harker from Philadelphia will speak.
The Sohn Conference will be held today in New York, which will bring together a large part of Wall Street's most influential and most followed investors. These include David Einhorn of Greenlight Capital, Bill Ackman of Pershing Capital and Jeffrey Gundlach of Double Line Capital.
Over the weekend, Warren Buffett, flanked by Bill Gates and Miami Dolphins defender Ndamuking Suh, addressed the "Woodstock of capitalism", as he himself defined the Berkshire Hathaway assembly, attended by 40 shareholders, a new absolute record. For the occasion, the "wise man from Omaha" harshly criticized Donald Trump's health care reform ("a great gift to the rich like me") and made self-criticism: "We have underestimated the technology sector, but we are correcting our mistakes".
AKZO SAYS NO TO PPG'S OFFER: 27,9 BILLION
Trump's son-in-law and top adviser, Jareed Kushner, is in Beijing to launch a real estate project with some Chinese state partners. "It is the most blatant conflict of interest in American history," writes the Washington Post.
Yet another clash between the titans is looming: the American Ppg has presented an offer of 27,9 billion dollars for the purchase of the Dutch Akzo Nobel, owner of the Dulux brand, with the aim of creating the world leader in paints . But the board said no. Probable start of a hostile takeover bid.
THE QUARTERLY REPORTS OF ENI, ENEL AND UNICREDIT ARRIVE
The quarterly reports will be at the center of Piazza Affari's agenda. Tomorrow the accounts of Bper and Mediaset will be released. Wednesday will be the turn of Eni and Poste Italiane. Thursday there will be the statements of Banco Bpm, Ubi and Unicredit. The Enel review will close on Friday. The quarterly reports of Commerzbank and Telefonica (Tuesday) are to be followed in the Old Continent. Thursday will be the turn of Crédit Agricole, Deutsche Telekom and Vivendi. Friday the accounts of Allianz. The calendar also includes the launch of the quarterly campaign for the Japanese automotive industry: Toyota, Nissan, Suzuki and Yamaha.
TREASURY AUCTIONS UNDERWAY. AND THE YIELD OF THE BUND FALLS
While awaiting the launch of the Btp Italia on Monday 15th, the mid-month Treasury auctions are starting. On Wednesday 10, annual bots for 6,5 billion will go to auction (against the same amount due). The amount of Wednesday's medium-term auction will be announced tonight.
Even before the outcome of the French elections, the financial markets bet on a favorable outcome for the euro: the yield on the German Bund rose from Friday to Friday by 10 basis points to 0,41%. That of the BTP fell by 10 basis points to 2,17%, and consequently the spread narrowed by 20 basis points to 176. Excellent news for the Italian public finances.
RAIN OF COUPONS FROM THE STAR. ITALIAONLINE DISTRIBUTES 25%
The Cairo Communication assembly is on the agenda of Piazza Affari on Monday: the appointment of the new board of directors and the buyback are on the agenda. During the day, the quarterly reports of Molmed, Parmalat, Ptima Industrie, Txt e.solution and Valsoia will be released.
The split of Campari is underway: two titles will be assigned for one already in circulation. Today, 24 companies in the Star segment take off their coupons. Among the others, the extraordinary dividend of ItaliaOnline stands out: the ordinary shares pay a coupon equal to 25% of Friday's quotations, 19% for the ordinary ones.
The dividend of Astaldi, Ascopiave (5%) and Cad.it (4,76%) is just under 4,50%. Above 3% Beghelli, Cembre, Iniziative Bresciane, Toscana Aeroporti and Zignago Vetro. Gpi, Mutuionline, Lucisano and Piteco follow (all above 25). Finally Italmobiliare (1,95%), Leone Film, Valsoia, Vittoria Assicurazioni, Esprinet, Datalogic, Biesse. Below 1% Boero, Reno De Medici, Reply and Tbs.
PIAZZA AFFARI STARTS AGAIN FROM +4,3% THANKS TO THE BANKS
When banks move to Europe, the Milanese list amplifies the movement. This is the explanation of the strong performance of the last five sessions of the Ftse Mib index (+4,3%, same increase the previous week) thanks to the boost from Unicredit (+8,7%), Mediobanca (+8,2%) and even more than Banco Bpm (+9,9%). Intesa (+6,3%) announced on Friday a profit for the first quarter of 2017 of 901 million, higher than analysts' expectations. The performances of Telecom Italia (+7,5%) and Leonardo (+6,2%) are also significant.
The yield on the German Bund rose 10 basis points Friday-to-Friday to 0,41%. That of the BTP fell by 10 basis points to 2,17%, and consequently the spread narrowed by 20 basis points to 176. Excellent news for the Italian public finances. The overall index of the Stoxx600 European Stock Exchanges gained 1,9% during the week.
