It is not yet the time for fear, but, as the tensions on the bond markets demonstrate, risk aversion is making itself felt again. It applies to the global economy, under stress due to the initiatives of Donald Trump, determined to engage the trade war with China, as well as for the domestic scenario: Matteo Salvini's openness to a government with the Five Stars, relaunched by the international media, translated yesterday into a surge in the spread, which then partially returned. And so, pending the next moves by the Fed, yields are rising again, as is the appeal of traditional safe havens. But without exaggerating, because the picture remains confused, open to new surprises.
Meteo Borsa is the mirror of the current uncertainties. Asian markets were mixed, but tensions eased somewhat towards the end of the session. Tokyo, in the red for the whole day up to losing a percentage point, is starting to close just above parity.
Same script in Hong Kong (from -0,8% to +0,1%) and in Korea (+0,2% from -0,5%). China's CSI index is up 0,3%, Mumbai up 0,1%.
The dollar is under pressure: the yen is close to 106 against the US currency, the euro is at 1.24. Meanwhile, the race for German Bunds resumes: the 0,583-year yield has slipped to XNUMX%, its lowest since January.
Weak US markets. The Dow Jones lost 1%, weighed down by Boeing's decline held back by tariff concerns. S&P 500 -0,5%, Nasdaq -0,2%.
Consumption fell for the third month in a row in February. Following the February downturn, Goldman Sachs and JP Morgan revised their GDP estimates downwards. The Atlanta Fed also cut forecasts.
Oil up slightly, Brent at 64,92 dollars, Wti at 61,04 dollars a barrel, after the release of a mixed report on reserves of petroleum products in the United States
TRUMP ENLISTS DOVE KUDLOW
Politics also in the foreground on Wall Street. Yesterday Donald Trump had to accept the Republican defeat in Pennsylvania, a state in which he beat Hillary Clinton by 20 points in the presidential elections, a serious alarm bell in view of next autumn's elections. “How will the president react?” asked Anthilia's strategist, Giuseppe Sersale. “Will he take it as a signal that Americans are less comfortable with his political agenda, and will he tone down the radical aspects of it, or will he go on the attack and accentuate them? Since it is Trump, there is no need to be too calm ”.
Yesterday, however, Trump cooled the tensions with the appointment of Larry Kudlow as chief of the economic staff of the White House, replacing the outgoing Gary Cohn. Kudlow, one of the best known economic commentators to the TV public, had supported Trump during the election campaign, but he also criticized him on his commercial policy choices.
CRYPTOCURRENCIES IN WITHDRAWAL: CLOSE IN SIGHT WITH THE G20
Bad times for cryptocurrencies: Bitcoin plunged to a one-month low at $8.250 (-10%); Ethereum, the second most popular currency, has slipped to $585. Google followed in Facebook's footsteps by banning cryptocurrency-related advertising, investors are getting nervous in view of the next G20 scheduled in Buenos Aires (Argentina) on March 19 and 20: on that occasion the finance ministers and central bankers could approve a press release asking for common measures to regulate the activity of non-regulated markets, on the basis of both what was already established last week by the Sec.
MILAN SLIDES TO THE BACK OF THE PLATOON
A mixed close for European markets under pressure from Trump's tariff statements. Milan suffers, held back by political uncertainty and by the expectation of the new rules on bank non-performing loans.
The worst stock exchange was in fact Piazza Affari, but the only one in positive territory in 2018. The Ftse Mib index (-1,05%) closed the session at 22.452 points. Frankfurt (+0,14%) is the only European market to close with a plus sign. Slightly down Paris and Madrid (-0,2%). London moved little (-0,09%).
THE SPREAD RISES TO 144 POINTS ON SALVINI'S WORDS
“Monetary policy will remain cautious, patient and prudent” because “we need further evidence that inflationary dynamics are moving in the right direction”. Mario Draghi thus reiterated yesterday in Frankfurt that the normalization of monetary policy will be prudent and gradual. But, to neutralize the anti-stress injections of the ECB president, the first effects on the market of political instability arrived, so far absent to the point that Scott Thiele, number two for fixed income in Europe at BlackRock, had gone so far as to say that " the absence of volatility in the Italian bond market after the elections – makes no sense”. But, in the end, the Italy risk returned to make itself felt on equity and fixed income lists.
The fuse was lit by Matteo Salvini's statements on the euro (“it was and remains a wrong currency”). The spread on Bunds widened up to 144 basis points, before closing at 142. The 2,011-year yield reached XNUMX%.
8The German Bund strengthened to a yield of 0,583% versus 0,61%. Portugal's race continues: the issue maturing in 2045 with a 4,10% coupon fell to 2,8% due to strong market demand.
ANGELONI (ECB): BANKS, ITALY IS A SPECIAL OBSERVATION
Italy is "under special observation" on the markets because its banks "still partly in a risky situation, said European Central Bank Supervisory Board member Ignazio Angeloni yesterday, explaining that after the observed reduction in non-performing loans by recently, the European Union is ready to take steps forward on risk-sharing proposals such as the single bank deposit guarantee.
Meanwhile, yesterday the European Commission proposed new measures on non-performing loans. Banks will have two years to achieve full coverage of potential losses from new unsecured loans. For those guaranteed, the banks will have to arrive at full coverage in eight years.
The increase in the spread sank credit titles in the afternoon: Unicredit -1,4%, Intesa -1,5%, Banco Bpm -1,5%. Under fire in particular Bper Banca (-2,3%).
ONLY LEONARDO SHINES. ATLANTIA AND TELECOM UNDER FIRE
The positive note came from Leonardo (+1,7%). In an official note, the group announced the signing of a maxi order from Qatar for 28 European NH 90 military helicopters. The order is worth more than 3 billion euros. The Italian group will act as prime contractor for the entire program and will be responsible for the assembly, delivery and support of 12 of the 28 helicopters, intended in particular for naval missions.
Very weak in the afternoon Atlantia (-2,53%) which communicated the details of the agreement reached yesterday with Acs and Hochtief on Abertis: a solution generally judged positive by analysts, but the agreement makes the prospect of raises hypothesized by the speculation.
Telecom Italia also lost share (-2,2%), among the worst telecommunications stocks, despite analysts confirming their positive views on the stock pending the Elliott's next moves.
GIGLIO GROUP PROMOTED BY AIM TO THE STAR
In evidence Ima (+0,73%) after the publication of the results. For 2018, revenues of approximately 1,55 billion euros and an Ebitda of 250 million are expected.
The best titles in all of Piazza Affari were Aeffe (+6,28%), Giglio Group (+5,56%, promoted by Borsa Italiana to the Star by Aim) and Leone Film Group (+4,85%).
Safilo fell sharply (-5%). The luxury eyewear company closed 2017 with a net loss of 251,6 million euros, against the loss of 142,1 million in the previous year, due to non-recurring items.
