A mixed start to the week, awaiting the market's response to the restructuring plan announced by Deutsche Bank. The data on US employment put a mortgage on the rally in the stock markets, so brilliant as to question the cut in Fed rates. Morgan Stanley's decision to reduce exposure to shares, judged too expensive, fits into this framework of their portfolios. Asian markets are thus moving in the red.
SHARP DOWN TOKYO AND HONG KONG
Tokyo leaves one percentage point on the ground. The decline of the Chinese indices was heavier: the Csi 300 of Shanghai and Shenzhen lost 2,2%, the Hang Seng of Hong Kong 1,5%. The words of Larry Kudlow, Donald Trump's economic adviser, who confirmed the resumption of talks on tariffs this week have no effect
The Korean Kospi retreated (-1,8%), sensitive to the effects of the trade war on chips.
The dollar moved little against the yuan and yen: the markets await the imminent intervention of the governor of the Bank of Japan Kuroda. The US T Bond trades at 2,02%.
OIL WARMS UP, THE TURKISH LIRA SHOULDER
Gold fell back below $1.400 an ounce on Friday as expectations for monetary stimulus fell, down 1,3%. It's at $1.398 this morning.
Tensions on the Iranian front are heating up further. Tehran has resumed uranium enrichment operations and has announced that it will soon cancel the other effects of the 2015 agreement denounced by Washington. Iran has also issued a new ultimatum to European countries, establishing another 60 days as the new deadline for diplomatic talks, otherwise there will be a "third stage" in the process of exceeding security limits. Brent traded this morning at 64,39 dollars a barrel.
Tomorrow the Emir of Qatar Tamim bin Hamad Al-Thani will meet Donald Trump at the White House. Among the topics of the meeting, also the growing tensions between Washington and Tehran.
Turkey's lira falls (cross to 5,75 from 5,62) after the government sacked the governor of the central bank Murat Cetinkaya, in his place, Erdogan, who was the deputy governor until Saturday morning.
DB WITHDRAWS FROM LONDON AND NEW YORK: 20 THOUSAND SEATS CUT
The euro rose slightly this morning, to 1,122 against the dollar, after -0,7% on Friday.
There is certainly no shortage of news on the chessboard of the Old Continent. Above all, it will be to move the waters Deutsche Bank, which announced the most gigantic restructuring of banking history, or the sensational renunciation of the twenty-year challenge to the leadership of American banks. The institute's plan provides for the creation of a bad bank to which you will confer high-risk assets for 74 billion. Part of the costs of the operation (3 billion euros out of the 7,4 billion to be spent by 2022) will weigh on the accounts for the quarter, which will close in the red for 2,8 billion. The bank will give up competing with the Wall Street giants as an investment bank. 18 employees are expected to be cut, concentrated in US activities and in the London investment bank.
The news comes at a time of great changes in the money industry, under the pressure of falling rates pending the decisions of the ECB on 25 July.
In the morning, two other price sensitive data arriving from Germany: industrial production and trade balance, particularly awaited after the signs of slowing down of the locomotive of the European economy.
GREEK BONDS IN THE RALLY, BTP IN TOW
The turning point in Athens is also of great importance. The victory of the centre-right was higher than expected: the center-right formation achieved 39,8% of the votes and thus obtained an absolute majority in Parliament. Party leader Kyriakos Mitsotakis is the new Greek prime minister. Outgoing premier Alexis Tsipras has already conceded defeat: Syriza obtained 31,5% of the vote. The vote could trigger new purchases of Greek bonds, already protagonists of a spectacular leap and, consequently, favor the run-up to the most fragile bonds, including BTPs, practically the only ones to still guarantee a positive return from five years onwards.
THE DBRS RATING HAS ARRIVED, NEW TREASURY AUCTIONS
Meanwhile, the Treasury's mid-month auctions begin. On Wednesday 10 the Ministry of the Economy will make 6,5 billion euro of 12-month BOTs available to investors. Tonight the amount of the medium-long term offer of Thursday 11 will be communicated.
On Friday, with stock exchanges closed, the Dbrs agency will update the Italy rating. The annual meeting of the ABI will be held in the morning and the economic bulletin of the Bank of Italy will be published.
IMF, FRANCE ASKS FOR A EUROPEAN DG
The game of European nominations has not yet ended, but we are already talking about the new director of the IMF. Today the finance ministers of the Eurozone countries will meet in Brussels for the Eurogroup. On the table, the discussion of the appointment of Christine Lagarde as new governor of the ECB and the choice of the EU candidate to lead the International Monetary Fund. According to the French Finance Minister, Bruno Le Maire, the role should be filled by a European.
POWELL IN THE SPOTLIGHT. INFLATION DATA COMING SOON
In the meantime, expectations are rising for the moves of the Federal Reserve. After the strong increase in US employment (224 new jobs, above the estimates of economists and a clear recovery compared to the previous figure, +72) the markets have reduced expectations for a rapid and robust cut in the cost of money by the Fed : in the month-end meeting, according to the consensus, there will be no talk of a drop of 50 basis points and the hypothesis of a cut of 25 basis points is more uncertain.
But, especially after the pressure from Donald Trump, the wait for the parliamentary hearings of the president of the central bank, Jerome Powell, has certainly not diminished. The premiere is set for tomorrow.
The data on US inflation, which will be released on Thursday, should also be followed, the last decisive step in understanding the Fed's orientation.
THE SUMMIT OF THE MEDIA BOSSES IN SAN VALLEY
Of note during the week is the media summit in Sun Valley, Idaho, which every year brings together the big bosses of the communication and entertainment industry: often the most important deals are planned on this occasion. Among the participants Rupert Murdoch, Jeff Bezos, Tim Cook and the two great rivals: Reed Hastings of Netflix and Bob Iger of Walt Disney. John Elkann is expected to be present.
BOEING AND LEVI'S STRAUSS ACCOUNTS COMING SOON
Budgets for the week include PepsiCo, Delta Airlines, and Levi's Strauss. However, tomorrow attention will be focused on Boeing's accounts.
The Milan Stock Exchange stopped on Friday after six consecutive rising sessions. The week closed with a gain of 3,6%, much better than the +1,4% achieved in the same period by the EuroStoxx 50 index.
