The financial week is off to a good start, in the wake of the agreement between the United States and Mexico which removes one of the fronts of the trade war. The worse-than-expected data from the US labor market, announced on Friday (only 75 more new jobs), suggest an acceleration in the decline in US rates. Instead, the Chinese trade balance is better than the estimates, but only due to the sharp drop in imports: the trade war, which held court at the G20 of the financial ministers in Fukuoka, continues. In the final communiqué, however, despite Washington's perplexities, the appeal to protect commercial relations emerges. On the sidelines of the proceedings, a meeting took place between the US Treasury Secretary Steven Mnuchin and the governor of the Chinese Central Bank Yi Gang.
YUAN TO THE MINIMUM, CHINESE IMPORTS DOWN
The better climate is reflected in the markets: shares are up today, safe-haven assets are down.
Tokyo is making progress (+1,1%) supported by the drop in the yen against the dollar, an indication of the decline in monetary tensions. The Rising Sun's GDP grew by 2,2% in the first quarter.
Hong Kong also performed well (+2%): the CSI 300 of Shanghai and Shenzhen +1,4%, the Korean Kospi +0,8% and the S&P ASX 200 index of Sydney +0,9%.
Futures signals S&P index futures higher. The yield on US T bonds is at 2,119, just above Friday's lows of 2,053%: the market sees the Fed on the move as early as July.
The yuan loses new blows, at its lowest for the year at 6,9366 against the dollar: Chinese imports fell by 8,5%, much more than expected, confirming the drop in consumption. The increase in exports (+1,1%) is probably the result of an attempt to avoid the effects of the new duties.
EURO STABLE, OIL UP BIS
The euro was stable at 1,1329, not far from the highs reached after the ECB meeting. The Mexican peso is up (+2%).
For gold, down 1% to 1.328 dollars an ounce, the first day of decline could come after eight consecutive increases.
Brent oil rose to 63,3 dollars a barrel, +0,5%, after +2,7% on Friday. Exploration activity, summarized in the number of active drilling rigs, fell in the United States last week to a fifteen-month low. Meanwhile, it seems that Saudi Arabia has managed to convince Russia to extend the agreements on production until the end of the year: today there should be a face-to-face meeting between the two energy ministers.
TOUR DE FORCE FOR TRIA, LAST ACT FOR THERESA MAY
Among the topics of the week, concern for the confrontation between the Italian government and Europe on public finances stands out. Economy Minister Giovanni Tria will brief the House and Senate on Tuesday, before flying to Luxembourg on Thursday for the Eurogroup, followed by Ecofin on Friday. It will be an opportunity for a direct confrontation with all the partners after the European commission has taken the first step in launching a debt procedure against Italy. First, however, a new round is announced with the government partners on the subject of minibonds rejected by Tria (and by Mario Draghi).
This morning Istat will communicate the trend of industrial production for April.
In the evening, the Treasury will announce the terms of the offer of medium-long term bonds on the 13th. At the Bot auction on Wednesday 12th, 6,5 billion of 12-month bonds will be offered.
Key week also for the United Kingdom. Theresa May will resign on Friday. The race between the eleven candidates to replace her at the head of the Tories will begin on Thursday: the favorite is Boris Johnson, a great supporter of Brexit. On the economic front, the data on industrial production and on the trade balance for April are arriving.
THE SUPERHOLDING OF THE BISCIONE AT THE START. BOLLORÉ AT THE CROSSROADS
Important day on the corporate front for the eternal confrontation between Italy and France.
To follow Mediaset. This morning at 7, London time, the financial director, the CFO Marco Giordani and his colleague of Mediaset Espana, Massimo Musolino, held a conference call with analysts to explain, before the opening of the markets, the new superholding under Dutch law under which the Italian and Spanish activities of the group will end as well as the stake acquired in the German Prosibensat. A move that has no fiscal value, but will allow industrial synergies and innovations in governance, especially with regard to Vivendi, now neutralized.
RENAULT-NISSAN: IT'S TIME FOR LITTLE
The Renault-Nissan front is always hot, while invitations arrive from the French side, we don't know how sincere, to reopen negotiations with FCA. In the meantime, however, French Economy Minister Bruno Le Maire's mission to Tokyo seems to have reached a dead end. The French minister has said he is willing to reduce the French state's stake in Renault to facilitate a deal with Nissan, but the war is raging. Renault, reveals the Financial Times, anticipated by letter that in the next assembly it will not vote in favor of the change in governance developed by the Japanese board. In response, the Japanese contested the presence of a French executive on the board due to "conflict of interest".
On the corporate front, the accounts of Inditex, the Spanish clothing giant, are to be followed during the week, an important thermometer for understanding the state of health of the retail sector. Analysts expect a 4% increase in sales.
