The most important stock exchanges in Asia (China, Japan and South Korea) are closed for holidays, but an icy wind blowing from the East that smells like a storm and which, given the collapse of raw materials, could affect the race inflation. This is the news arriving from Hong Kong and Sydney, the two most important markets opened this morning, on the eve of the central bank meetings.
CHINESE EXCHANGES CLOSED, EVERGRANDE -17%
Hong Kong this morning leaves 4% on the ground despite having almost halved the initial losses (up to -7%). At the heart of the crisis is, as usual, the real estate giant Evergrande down 17% in view of the default of some bonds. The crisis in the sector worsens, but Beijing is not moved. Indeed, according to Reuters, the party summoned the large operators of the former colony to announce that the speculative excesses of the past will no longer be tolerated.
RAW MATERIALS HOLD BACK, IRON -12%
President Xi also said over the weekend that China will use "market tools" to control commodity prices, probably tapping into the country's strategic reserves. The news helps to depress both commodity prices and the Australian stock market. Sidney loses 2,2%, The most sensational collapse concerns iron ore, the basis of steel, treated in Singapore tonight up to -12%. Since the highs in May, the future has lost about 60%. But copper also fell -1,45%, aluminum futures lost 1,30%, platinum 2,55%, palladium -3,35%. Silver and gold are also lower.
The other markets in the Far East were also weak, Aia Pacific index -1,4%. Mumbai -0,3%.
THE DOLLAR RISES, THE NASDAQ FUTIRES DOWN
Wall Street futures anticipate a 1% lower start on the eve of the FOMC meeting.
The dollar appreciates for the third consecutive day, the euro dollar is down by 0,1% to 1,171. Ahead of Wednesday's Federal Reserve announcements, the 1,37-Year Treasury Note weakens, the yield climbs to XNUMX%.
Gold also fell to 1.745 dollars an ounce, -0,5%. WTI oil at 71,4 dollars a barrel, -0,7%. Bitcoin down 4% to $45.500.
12 CENTRAL BANKS REPORT
There will be at least a dozen central banks that will meet this week to define the lines of the money supply to the economies threatened by Covid -19 and inflation. Someone (see Japan) will confirm the current policy, others (Norway) will raise rates. Most will limit themselves to signaling increases in the future. This is what the markets expect from the Federal Reserve which will inform the markets of its choices on Wednesday evening: the US central bank should open the doors to a start of tapering (ie the reduction of purchases) in November.
MARKETS BET: TAPERING IN NOVEMBER
But the markets are already wondering about the first rate hike after the long "soft" season. For now, the climb is expected to begin in the first quarter of 2023. The ECB, according to a confidential Frankfurt study, could follow at the end of that year.
In this context, prudence seems mandatory for the markets. A Deutsche Bank survey conducted mainly on professional investors shows that almost 70% of respondents expect a temporary setback on the stock market between now and the end of the year.
The news expected from the other banks, namely the United Kingdom, Japan, South Africa, Indonesia, Brazil and Turkey, is of no small importance. The Bank of England, while keeping rates at 0,1%, could announce its intention to rise to 0,25% by May to counter inflation, currently at 3,2%. Japan stable, much more difficult choices for Brazil and Turkey, grappling with the revaluation of the dollar. The extreme uncertainty of the economic situation is underlined by the opposite approach of the Scandinavian banks. The central bank of Sweden is preparing to cut the cost of money to zero, that of Norway will probably be the first to start the rate hike. Concerned about the rise in house prices. The Swiss central bank will close the review.
THE PMI DATA AND THE IFO INDEX ARRIVE
The incoming macro data will be in the spotlight: the flash SMEs will be used to measure the impact of the Delta variant on manufacturing activity and the recovery of services.
In addition, the German ifo Business Confidence Index and the EU Consumer Confidence Indicator will be released on Friday and Wednesday respectively.
THE GERMAN ELECTIONS IN THE SPOTLIGHT
Great attention is also paid to electoral choices. Voting takes place in Canada, but especially on Sunday elections will be held in Germany, the last act of Angela Merkel's long political career. The outcome of the vote will be followed closely in the financial markets: interest will focus on the will of the new executive to maintain a "strict" fiscal policy and on the future climate policy of the leading country of the European Union.
FEDEX AND NIKE ACCOUNTS AT WALL STREET
In the USA, the issue of raising the debt ceiling, necessary to make the federal machine work but contested by the Republicans, will remain the focus. The first vote on the investment plan proposed by the Biden administration should take place within the week. Wall Street looks at the tax measures needed to finance the promised investments. The company calendar includes two important financial statements: Fed Ex and Nike as well as the Goldman Sachs conference on Peloton, At&T and Disney.
DRAGHI PRESENTS THE NADEF AND GOES TO CONFINDUSTRIA
The key appointment for Italy will be the Confindustria assembly on Thursday. After the report by the president of Confindustria Carlo Bonomi and the traditional speech by the minister for economic development, Giancarlo Giorgetti, the closing speech by the prime minister Mario Draghi is eagerly awaited.
In the coming days, the government will approve the Update Note to the Def (the Economic and Financial Document) with the new projections and with which it will open the long budget session. The text will highlight the objective of economic growth of more than 10 per cent for the two-year period 2021-2022.
The Italian economy will close 2021 with an increase of around 6 percent (a +4,5 percent was expected) after the collapse of 2020 (-8,9 percent). In the second quarter of 2021, GDP grew by 2,7 percent more than France and Germany did.
FROM TODAY ANTARES IN THE MID CAP OF PIAZZA AFFARI
The first autumn dividends arrive today in Piazza Affari. An advance payment on the Eni coupon (0,43 euro) and Stm (0,06 euro second tranche for the 2020/21 financial year) are detached. Piaggio (0,085 euros) and Sesa (0,85 euros) do the same.
The revision of the Borsa Italiana indices is arriving this morning. Promoted in the Mid Cap Antares Vision and Wiit index. Banca Carige also enters.
JUVENTUS, AFTER THE BUDGET, THE GOOLEDA IS FEARED
The reaction of the market to Juventus' accounts should be followed, after the highest deficit in the club's history, i.e. 210 million more than the 190,7 shown by the accounts of the parent company Exor. The capital increase submitted to the shareholders' meeting at the end of October has been confirmed.
