Closer warindeed probable. Vladimir Putin's decision to recognize the rebel republics of Donetsk and Luhansk is confirmation of Russia's willingness to invade Ukrainian territory without leaving room for diplomatic attempts. As a consequence, the first Western sanctions are triggered, for now in limited form. The White House has announced through a senior official that there will be a meeting of the national security council in the next few hours. The State Department has issued a statement in which it reaffirms its desire to avoid a brutal and bloody conflict.
It is easy to predict that a day of passion is looming on the markets. The first consequence was the immediate one rise in the price of oil: 97 dollars per barrel for Brent (+66%), 2,4 dollars for US crude. But it could be just the beginning: JP Morgan predicts that, without a clearing, it will soon reach $95.10.
The Asian price lists are in deep red. Tokyo's Nikkei loses almost 2%. CSI 300 of the Shanghai and Shenzen price lists -1,5%. Kospi of Seoul -1,7%. Worst session in the last five months for Hong Kong's Hang Seng (-3%) which slipped this morning to its lowest ever. Alibaba loses 4%.
Futures on US markets signal a start down 1,7% for the S&P and 2,3% for the Nasdaq. Yesterday the US stock exchanges remained closed for President day. Despite the heavy losses of the big technology companies (-30% since September), a report by JP Morgan claims that the decline will be even deeper: from the maximum Facebook loses 38%, Netflix and Google 35%. Amazon 8,7%. Apple defends itself: -5,7%. The forecast is based on the parallel rise in yields on the T bond up to 2,35%. But this morning the 1,89-year US traded at 5%, down by XNUMX basis points. The geopolitical emergency could force the Fed to review the timing and methods of rate hikes.
The cross dollar-ruble is up 3% this morning. Fifth consecutive day of decline for the euro to 1,130. Bitcoin at $37.000, on the lows of the last three weeks.
Also for the Eurostoxx a new difficult session is being prepared, after a tense Monday.
European price lists on roller coasters (and in red)
A day on a roller coaster, with an inevitable final in red. The European financial week could not have started otherwise, hit by the shower of conflicting signals on the trend of the Ukrainian crisis. Just to underline the fragility of the EU, throughout the day the absence of Wall Street, closed for President Day, helped to raise the volatility rate and reduce volumes. The rebound between the positions of the two main duelists obscured the openings of French President Emmanuel Macron, held back by Moscow's skepticism. Other firefights on the Donbass border and the killing of five Ukrainian "saboteurs" who tried to cross the border also contributed to raising the temperature of the crisis, although Kiev denies this trespassing. President Putin has recognized the independence of the self-proclaimed Donetsk and Lugansk People's Republics.
Pandemic in braking, services restart
The war emergency overshadows the encouraging data from the euro zone's economic recovery, which saw a strong rebound in February, with the services sector supported by the lifting of restrictions against the coronavirus, even as consumers grapple with prices rising at record rates. This is what emerges from the flash survey Composite Purchasing Managers' Index by IHS Markit. The index rose in February to a five-month high of 55,8 points.
Spread at 171, Moscow CDS jump to 327
Against this backdrop, risk aversion on the bond markets is growing. As usual, the BTPs are paying the price just a few days after the start of month-end auctions starting Wednesday with the offer of short BTPs for 3 billion. If the Bunds saw a recovery in the middle of the session – with the 4-year rate at its lowest since 0,174 February at 170% – the Italian paper remained in negative territory with a consequent widening of the spread on the 1,92-year segment, going beyond 0,2 basis points, and the 0,21-year benchmark rate rose to XNUMX%. The ten-year Bund yield drops to +XNUMX% (from +XNUMX%).
Outside the eurozone, Russia suffers most, with CDS rising to 327 basis points and exceeding the 300 threshold for the first time since April 2016. The ruble has lost up to 3%.
In Zurich Credit Suisse -3% after the scandals
In the rest of Europe, Paris -2,04%; Amsterdam -2,04%; Frankfurt -2,09%; Madrid -1,18%; London -0,42%. Weak Zurich (-1,13%), under the pressure of yet another scandal of Crédit Suisse (-3,10%). The Zurich institute, far from new to money laundering and violation of banking rules, ended up at the center of the investigation into 18 accounts and 30 people for a total of over 100 billion euros indicted for money laundering or other political crimes and not.
Vivendi raises its offer for Lagardere
In Paris, Vivendi raised the takeover bid on Lagardère's titles to 25,50 euros (from 24,10), with the aim of gaining control of Hachette which, combined with Editis, could give the green light to the birth of the first publisher of books in France.
SocGen downgraded L'Oréal's rating: -1,6%.
Exor (-4,5%) makes peace with the tax authorities. Under fire Cnh
In Piazza Affari, sales have infected all sectors. In particular, the Agnelli stable was under fire on the eve of the Capital Markets Day of Cnh Industrial (-3,74%) and after the indications provided by the US competitor Deere. Leading the decline was Exor (-4,51%). The group's safe on Friday evening announced a settlement agreement, worth 746 million, with the Italian Revenue Agency regarding the transfer of the registered office to the Netherlands in 2016. More contained but consistent reductions for Stellantis (-2,32%), Iveco (-2,61%) and Ferrari (-1,72%).
Juventus +1,36%: federal investigation into capital gains closed
Only Juventus is up (+1,36%) who are playing a good part of the season today in the Champions League against Villareal. In the evening, the club announced the end of the investigations by the Football Association into the capital gains of the club and ten other clubs.
Oil prices down, Ukraine effect on Pirelli, Danieli and luxury
Oils are down sharply: Saipem -3,18% ahead of Tenaris -3,14%. Eni was also in the red (-1,16%).
The hypotheses of sanctions against Russia in the event of an invasion of Ukraine weigh on Pirelli (-2,7%), which produces around 10% of its global tire production in the two Russian plants. Among the stocks exposed to Russia also Danieli (-3,5%). Luxury is also down, held back by possible sanctions against Moscow.
The winds of war deflate Autogrill's recovery (-4,71%).
Weak Tim, the pink jersey goes to Nexi
Weak Telecom Italia (-2,8%). The company expresses "disappointment and concern" for press reconstructions on the targets of the new plan on which the new CEO Pietro Labriola works, branding them as "unfounded and harmful to the company" and announcing complaints to the Public Prosecutor's Office and Consob. “The plan”, explains Tim, “is being defined” and will be discussed in the Board.
Lively Nexi (+1,02%). Confirmed by Bloomberg's anticipation according to which the company is in exclusive negotiations for the purchase of the merchant acquiring business of Bper (-1,02%), weak like the other banks: Bpm -2,01%, Intesa Sanpaolo -1,76%, Unicredit -1,75%.
The listing of De Nora, leader in hydrogen, is on the way
An exceptional IPO is in sight for the Italian market. The board of directors of the group De Nora has approved the start of the listing process of ordinary shares on Euronext Milan, managed by Borsa Italiana, and the request to Consob for authorization to publish the prospectus. Any placement operation will be launched compatibly with market conditions.
The value of the company is expected to be around 5 billion euros, according to a source familiar with the situation. De Nora is an Italian multinational specialized in electrochemistry, a leader in sustainable technologies and in the nascent green hydrogen industry. The shareholding structure is controlled by the De Nora family (64% of the shares), while the minority shareholder is Snam Rete Gas with around 36% of the capital. Both partners will remain in the capital after the listing.
