MERKEL WIDES THE PURSE STRINGS.
THE IMF: RECORD BANKS ARE NOT ENOUGH, SPREADS FALLING. IN THE FACE OF THE Pitchforks
Angela Merkel raises. Germany, according to rumors arriving from Berlin, is in favor of increasing the total firepower to defend the euro area up to 750 billion euros: the 250 billion of the ESM which will start next July will be added to the 500 billion allocated to the EFSF. But, as usual, there is one condition: Berlin calls for stricter rules and stricter commitments (including penalties) on the "Fiscal Compact" front. The proposal was made on the sidelines of the conference in the German capital in which Christine Lagarde, managing director of the IMF, he vigorously relaunched the call to equip the eurozone with firepower capable of convincing speculators to desist from attacks on Italy and Spain that "could have a disastrous outcome". Madame Lagarde has chosen to launch her attack on German orthodoxy a stone's throw from the Brandenburg Gate: "it's up to you - she said - to avoid reliving 1930", i.e. the year in which a ruinous credit crunch transformed the recession into depression.
Meanwhile, in Brussels he continued, with the usual unnerving diplomatic phlegm, the negotiation on the "voluntary" discount imposed on Greece's private creditors. The conflict that keeps the markets in the balance apparently appears tiny: the IIF, which represents the creditors, does not want to go below 4% interest on new long-term bonds, the EU insists on 3%. The role of the bad policeman is played by Dutch Finance Minister Jan Kees De Jaeger: “We are interested in dealing with a debt that Greece can support – he said -. Whether it's voluntary or not matters to me up to a certain point”. We will see. Commissioner Olli Rehn displays optimism. Cypriot minister Charilaos Stavrakis warns: "The door to negotiation cannot remain open indefinitely".
However, the European doves yesterday scored a point in their favor. The Finnish elections have decreed the confirmation of the conservative premier Ninisto, who certainly hasn't shown himself to be tender towards southern Europe. But the vote resulted in a defeat for the Eurosceptics.
BAGS, EUROPE BELIEVES IN THE AGREEMENT WITH ATHENS
USA AND JAPAN PRICE LISTS TRUST LESS
Markets reacted differently to the news coming from the negotiating front. In the Old Continent, the markets have taken for granted an imminent agreement, according to what was foreseen by the European Commissioner for Economic Affairs, Olli Rehn.And so, behind Piazza Affari +1,7% in the wake of the boom in banking stocks, the London Stock Exchange rose by 0,9%, Paris and Frankfurt +0,5%.
In Use, on the other hand, the failure to sign the agreement, already taken for granted before the weekend, has caused some nervousness. The lists thus closed with bated breath: Standard & Poor's 500 +0,1% (fifth consecutive session up), Dow Jones and Nasdaq down by 0,1%. Among the news of the day to note the slide of Halliburton, which predicts a drop in orders in North America. And the decision by Texas Instruments to cut a thousand jobs on the occasion of the closure of some plants.
A note of color: Starbucks has decided to serve alcohol in 25 outlets from five in the afternoon onwards with the aim of conquering the after hours market from Seattle to Chicago. Uncertain trend also in open Asian markets: Tokyo closes with a modest +0,16%, futures on S&P's are down.
The sovereign debt crisis is less scary. But the race for a safe German port continues. Germany yesterday placed 12-month Treasury bonds for 2,54 billion euros at an average yield of 0,07%. Demand was more than double the supply with a bid-to-cover ratio of 2,2. In the previous auction, the yield was 0,346% with a bid to cover ratio of 4,3. Despite S&P's predictable demotion of Socgen and Credit Agricole (plus the negative outlook for Bnp Paribas), the French annual bond auction met with an excellent response.
Ma comforting notes are coming from the Italian debt front: yesterday there was a sharp drop in the yield on ten-year BTPs, down to 6,07% (-19 basis points). The spread with the Bund narrowed to 410 points. The yield on the two-year BTP fell to 3,52%, the lowest since August. The pitchfork blocks do not affect the international credibility of the Monti government. Maybe they consolidate it.
DELLA VALLE ALSO JOINS UNICREDIT
A2A AND IREN ARE LOOKING FOR A FUND AS A FRIEND
The banks were the great protagonists: Ubi Banca gained 5,8%, Banco Popolare + 3% Pop.Milan + 1,9% Mediobanca + 5,5%. intesasanpaolo it follows with +5,4%. But the real superstars have been Mps Bank +14,04% and Unicredit +10,44%. In the meantime, the news of Diego Della Valle's imminent entry into the shareholding in Piazza Cordusio is confirmed.
Positive day also for asset management securities: Azimuth +4,8%, bgeneral hip +5,8%, slightly down Mediolanum -0,3%. In the insurance sector, Generali rose by 2,2%, good recovery of Unipol+6,9% which moved the board of directors who will have to define the entry proposal to next Saturday Fonsai. The council of the Florentine company is also postponed from Friday 27 to Sunday 29.
The stock market's rise was held back by utility weakness: Enel fell by 0,5%, Enel Green Power lost 1,9%, Terna -1,3%.
A2A and Iren reached an agreement on the governance of Edipower. The entry of a financial shareholder, read an international investment fund, to strengthen the company with fresh means is increasingly probable. Today it will be possible to hold Edison's board called to give the go-ahead for the reorganization without the risk of new negative surprises.
After decree on liberalization on Fridays, Snam fell by 1%, Eni on the contrary it gained 0,6%. Also on the rise Atlantia +2,1%. Highlights too Finmeccanica +6,1%. Continue the bounce of Fiat +1,7% and Fiat Industrial +4,1%. Finally, Maretta at home Rcs. As expected, the via Soferino board of directors did not address the issue of recapitalizing the group, which also appears to be the best way to deal with the inevitable devaluation of the Spanish stake in Recoletos, imposed by the imprment tests. In exchange, it was decided to cease publication of the free City and the "enhancement" of part of the via Solferino complex, with the inevitable move of the Gazzetta dello Sport editorial office to via Rizzoli: storm winds are forecast.
