Hanging over Italy is "the sharp increase in volatility expected on the market close to the first week of December", as forecast by Banca d'Italia's Meteo Borsa. It will in all likelihood be a very difficult week for BTPs, which have risen above 2% and are struggling with the sharp increase in the spread (maximum of 187 points). But also for banks, starting with Mps and Unicredit, which are weighed down by the unknown factor of the December 4 referendum and the feared forthcoming budget tightening coming with the Basel 4 rules, arriving on Tuesday November 29, without forgetting the directorate of the ECB on the 8th.
"There is no conspiracy against us", Minister Pier Carlo Padoan rightly underlines, but our crisis coincides with the change of course of American monetary policy, which has now entered a season of rate hikes, bad news for our debt. The only positive note, as usual, is Mario Draghi's determination in favor of Qe, despite the strong pressure coming from Germany. Today the president of the ECB will present the annual report to the Parliament in Strasbourg.
Global finance, in truth, looks at the problems of our country with a certain detachment. Attention is focused on the forthcoming rate hike, confirmed before Congress by Janet Yellen, reaffirmed on Friday by Wiliam Dudley, head of the powerful New York Fed and probably confirmed by the forthcoming publication of the minutes of the November meeting of the US central bank. It is easy to predict that the upward trend will continue beyond the December 13-14 meeting.
In the wake of the rise in US Treasuries, inflation expectations have grown to their highest levels for a year and a half: Donald Trump is ready to put into practice the fiscal expansion promised in his electoral campaign. In January 2016, the Fed withdrew from raising rates due to concerns of a collapse of the Chinese economy. Today Donald Trump instead accuses Beijing of manipulating exchange rates to favor exports. Thus a tug of war between the titans is looming. Meanwhile, China, determined to take over Washington's role as commercial leader, over the weekend became the reference shareholder of the first Portuguese bank, the Bcp, thus making its entry into the European banking system.
TOKYO IMPROVES INDUSTRY
Oil and Italian banks are the keynotes of Meteo Borsa's forecasts. Positive start this morning of the Asian Stock Exchanges. Tokyo rises (+0,8%) favored by the weak yen (-10% since the day of the US elections). The macroeconomic data on Japan released tonight signal a generalized recovery: in September the index of industrial activities gained 0,2%, against expectations of zero growth. On the other hand, the data on exports and imports are slightly below the estimates.
China's stock markets are mixed: Hong Kong on parity and Shanghai up 0,7%. Seoul loses 0,3%. Mumbai loses 1,2%. The Indian Stock Exchange closed the last five sessions down and is at its May lows. Meanwhile, the flight of capital from emerging countries is picking up speed (7 billion fleeing funds in just one week) and the risk of a war between currencies, triggered by the race for the dollar and the parallel decline of the yuan today (for the twelfth day in a row) down against the dollar. The euro traded this morning at 1,0589 just above the low of the year (1,0569).
PUTIN: "THE UNDERTAKING ON OIL IS LIKELY"
Oil prices are accelerating. After last week's leap forward (+5%) Brent rose this morning to 47,41 dollars (+1,3%) and Wti to 46,3. Confidence is growing in an agreement at the meeting on 30 November in Vienna on production cuts by Opec countries (and Russia). "I'm not 100% sure - said President Vladimir Putin - but I really believe that the agreement is within reach". Saudi Arabia, together with some Gulf countries, has proposed to Tehran to increase production to 3,6-3,7 million barrels per day against the initial Iranian request of 4,2 million.
SHORT WEEK FOR WALL STREET
Wall Street, on its honeymoon with the new president, is getting ready for shopping. Thursday the US Stock Exchange will be closed for Thanksgiving Day. Friday, traditionally the starting date for Christmas shopping (now via the web rather than in large malls), the market will close its doors at 12. It is expected that 137,8 million Americans will make purchases both online and in the coming weekend shop. In the past week, the Standard & Poor's index rose by 0,8% and the Nasdaq by 1,6% after hitting a new record on Friday morning. Dow Jones +0,1%.
MILAN STARTS AGAIN FROM -3,2% THE SPREAD FROM 187
The rise in oil could be the keynote of this morning's opening of the European stock exchanges. On the political front, the star of Nicolas Sarkozy has completely faded, only third in the primaries of the centre-right led by François Fillon. In Germany, Angela Merkel, who has led the country since 2005, announced his fourth nomination.
Milan reopens its doors after a very difficult week. The Ftse Mib index, under pressure from the referendum, dropped 3,2%, against an average drop of 0,3% for European stock exchanges.
Government bonds are under pressure. The yields of the Btp have grown up to 2,08%, despite the purchases of the ECB. And the spread is rising, both towards the German Bund (187 points) and towards the Spanish Bonos (nearly 50 basis points). In this context, Treasury auctions will resume at the end of the week with the offer of Ctz and Btpei next Friday.
MONTEPASCHI HUNTING FOR THE QUORUM FOR THE ASSEMBLY
The balance sheet of the banking sector is dramatic (-10% in the last five sessions). The stocks most affected were those of Banca Pop.Milano (-15,5%) and Banco Popolare (-14,9%). Ubi fell by 14,4%, Unicredit -12,8%.
In this setting, a crucial week opens for Monte dei Paschi. Thursday 24 is convened the extraordinary shareholders' meeting which will have to give the formal green light to the recapitalization operation for a total of 5 billion euro. But for the valid constitution of the meeting - establishes the civil code - it is necessary that there are shareholders representing at least 20% of the share capital.
At the moment, the certainty is just over half of that twenty percent: the Treasury (4%), Axa (3,1%), Alessandro Falciai (1,8), Mps Foundation (1,5) and Fintech ( 1,3) – they combine 11,7%. In the meantime, today the Board of Directors will give the go-ahead for the transfer of the mezzanine tranche of non-performing loans to the Atlante fund for 1,7 billion. Finally, by next Monday, the bank plans to define the "voluntary" conversion of the subordinated bonds.
The week will close with the assembly of Banca Popolare dell'Emilia Romagna, convened for the transformation of the institution from a cooperative to a joint-stock company. The price of the right of withdrawal for those who will not participate in the approval of the resolution has been set at 3,807 euros per share.
RAIN OF DIVIDENDS, ENEL AND GENERALI "UNREVEAL"
Today, eight companies are detaching a coupon. In particular, Azimut distributes an extraordinary dividend of 1 euro (6,33% yield) and Mediobanca pays the ordinary coupon: 0,27 euro (4,16% yield). Interim dividends for Atlantia (0,44 euro) (2,21%), Mediolanum (0,16), Recordati (0,35), Sias (0,14) and Terna (1).
Among the most important appointments of the week also the update of Enel's strategic plan (Tuesday 22) and the investor day of Generali (Wednesday 23).
