FLOOD ON THE MARKETS, MILAN FALLS.
THE SPREAD AT 370 BP
More than a storm, there is an air of universal deluge on the global finance lists where it is hard to find a single indication that is not bad. The drop in equity prices after Black Friday has picked up speed. The Milan Stock Exchange, in deep red since the opening, gradually worsened the situation until it broke through the 5% barrier (-5,26% at 15pm). At the end of the session, only Frankfurt is worse than Piazza Affari. In Milan, the Ftse Mib fell to its lowest level since March 54, at 2009 points (-14.333%).
INTESA AND UNICREDIT REDUCED SUSPENDED. EXOR -7%
BNP AND SOCGEN SINCE PARIS. DB FRANKFURT
In Milan, stocks such as Intesa Sanpaolo -6,96%, Unicredit -7,3% Bpm -7% (capital increase practically unattainable under these conditions), Ubi -4,62% and Exor -7% sink. However, the very heavy reductions in Piazza Affari are not limited to the financial sector alone. None of the Ftse Mib titles remained in positive territory. Fiat drops by 6,46%, Fiat Industrial -6,74%, Prysmian -3,48%, Finmeccanica -5,9%. It's still. Enel drops by 4,37%. Enel Green Power -5,34%, penalized by Bank of America recommendation cut. Oil is down with WTI at 84,1 dollars a barrel (-2,7%), Eni down 4,4%, Saipem -6,1%. Saras was suspended on the downside, the stock losing 10,3%. It didn't go better on other squares of the Old Continent. Bank stocks, also hit by the US government's lawsuit for having kept silent about the real conditions of subprime mortgages from Fannie Mae and Freddie Mac, dragged down all the European stock exchanges, with the sector's Stoxx down by almost 6% and tension peaks in France, where Société Générale sells 8,64% and BNP Paribas over 5,21%. The markets of the Old Continent, orphans of Wall Street, closed today for Labor Day, which Obama celebrates in Detroit, seem unable to counteract the sales. The Dax is the worst index, with a drop of 5,28% to 5.217 points, while the Cac is also bad, falling back by 4,73% to 2.991 points.
THE BTP RETURNS 5,54%, THE BUND LESS THAN 2
AND TREMONT MEETS BOSSI AND CALDEROLI
But falling stocks are not the most pressing issue in a high-risk situation on the debt market front. The yield of the German Bund plummets below the 2% threshold to 1,90% on the push of investors looking for safe havens from the recession. Meanwhile, the Swiss franc, which has slipped to 1,1109, is approaching parity with the euro, an eventuality predicted by a synthetic product suggested to VIP clients in mid-August by Goldman Sachs strategist Alan Brazil. The decline in the Bund is one of the reasons that push the spread between the German 5,44-year bond and the BTP to stratospheric levels, which shot up to a yield of 354%. Thus the gap first reached 368 bp, thirty points more than the Spanish equivalent, to then make another leap towards the record of XNUMX bp. Economy Minister Giulio Tremonti anticipated his return to Rome to participate in a meeting with Treasury technicians. Previously Tremonti had met Umberto Bossi and Roberto Calderoli in the Lega headquarters in Milan
THE ECB BOUGHT ANOTHER 13,3 BILLION BTPs
DRAGONS AND TRICHETS: “DON'T TAKE THEM FOR GRANTED”
In the week that ended last Friday, the European Central Bank announced that it had purchased government bonds of Eurozone countries for 13,305 billion euros, more than double the value of 6,651 billion a week earlier. The ECB will provide updates on the secondary market purchase plan (SMP) launched in mid-August at the next meeting of its executive committee, on Thursday 8 September. This morning the governor of Bank of Italy and incoming president of the ECB warned states not to take Eurotower purchases for granted. First there will be the response of the German Constitutional Court on the legitimacy of the purchases made by the central bank of the bonds of countries in difficulty operated by the central bank on the secondary market. Another thorny issue: the Greek debt. In this regard, there is a real ultimatum from Hemann Grohe, Angela Merkel's secretary: “Solidarity and responsibility – he declared to the Financial Times des Deutschland – must go hand in hand. Greece must build large economies and plan privatizations if it wants to get aid”.
