The markets are approaching the Fed's rate cut without much enthusiasm. Asian stock markets are opening in the red, also held back by economic data from China. 80% of operators believe a reduction of 0,25% is certain, only one in four bets on a reduction of half a point as President Trump would like. Attention will focus on the words of the Fed president who, according to the most optimistic, could promise a 1 percent reduction, staggered into several interventions by 2020. While waiting for Wednesday's decisions, the stock markets are stalling: the resumption of negotiations between China and the US does not warm the atmosphere, weighed down by new protests in Hong Kong and tensions over Brexit.
The worst stock market is that of South Korea (-1,7%), held back by the decline of Samsung (-2%). The tug of war on chips with Japan weighs. Tokyo loses 0,5%.
Hong Kong is also suffering (-1,2%), recovering from new violent protests. Chinese lists were also negative: Shanghai -0,2% on the day of the resumption of talks between the superpowers. The renminbi, China's currency, weakened to 6,89 against the dollar.
The euro is unchanged at 1,128 against the dollar. The single currency appreciated for the third day in a row against the pound at 0,899. The Brexit war cabinet appointed by Prime Minister Boris Johnson, the body led by Michael Gove, meets today for the first time. The premier's deputy will meet to the bitter end every day to obtain a reopening of divorce negotiations from the European Union. In case there is no willingness on the part of Brussels to revise the pact reached with Theresa May, he will work towards a no-deal exit.
Tension between the EU and the United States is also growing. If France insists on taxing the profits of the GAFA (Google, Amazon, Facebook, Apple), the US will put duties on French wine, promises Donald Trump.
Gold strengthens to 1.422,55, favored by the fall in the cost of money.
Weak oil: Brent at 63,23 dollars (-0,3%) in the face of declining demand.
FROM PHARMA TO MEDIA, WAITING FOR POWELL M&A BOOM
The prospect of an imminent drop in the cost of borrowing offers a powerful incentive for M&A transactions. Over the weekend, Pfizer and Mylan reached an agreement to merge their generic drug businesses, a $9,5 billion deal involving, among others, Lipitor and Viagra, which will give rise to the world leader in the sector.
The London Stock Exchange has confirmed the negotiations for the purchase of Refinitiv, the competitor company of Bloomberg in the provision of financial data sold a year ago by Thomson Reuters to Blackstone. The deal is valued at around $27 billion.
FED, TOWARDS FIRST CUT IN EIGHT YEARS
The financial markets are looking to the decisions that the Federal Reserve will announce on the evening of the 31st. There is a unanimous forecast that the Central Bank will proceed with the first rate cut for eight years but will limit itself, barring surprises, to a quarter of a point despite the slowdown in GDP on 2,1 XNUMX% in the second quarter and the pressure coming from the White House which has been pushing for a much more drastic intervention for months. To follow the press conference of President Jerome Powell, which could anticipate further stimuli.
In the same days, the US team, made up of Treasury Secretary Stephen Mnuchin and trade representative Robert Lightizer, will be in Shanghai to pick up the thread of tariff negotiations with Liu He, Xi's appointee. But the turning point, warns Trump spokesman Larry Kudlow, is still far away.
Also noteworthy is the data on the US labor market which will be released at the end of the week, after the Fed meeting. On the macro front, consumer confidence, the trend in manufacturing and the construction market are also on the US agenda.
THE CAR TO JOHNSON: HARD BREXIT, DEADLY DANGER
To complete the picture of the central banker meetings inaugurated by the ECB there will be, among others, the meeting of the Bank of England: operators are convinced that Marc Carney will not move the interest rate lever downwards, pending developments in the political situation hot. Major automakers have written to Boris Johnson to say the hard Brexit choice poses "a mortal threat" to the sector.
The wait for the Bank of Japan meeting, the first after the electoral confirmation of Shinzo Abe, is less turbulent: the confirmation of Tokyo's ultra-expansive policy, which is now influencing all the central banks, is taken for granted.
Rates will undoubtedly be cut by at least a quarter of a point by the Central Bank of Brazil, in an attempt to counter the recession that is advancing despite the wicked investments in the Amazon promoted by the Bolsonero government.
EUROZONE GDP ON THE AGENDA
In Europe, after the disappointment of lack of expansionary decisions by the Central Bank, attention is concentrated on the trend of the gross domestic product of the main countries of the Eurozone (a disappointing +0,4% is expected).
ITALY FALLING WITH THE MANEUVER. 6,5 BILLION BOT AUCTION
For Italy, Istat will release the data for the second quarter on Wednesday. Data on employment and industrial production are also awaited. Meanwhile, Economy Minister Giovanni Tria will be working to find the necessary coverage for the Autumn Maneuver under the pressure of Matteo Salvini's ultimatums.
In this context, the Treasury will offer this morning 6,5 billion euro of six-month BOTs.
On Friday, the yield of the ten-year BTP rose again to 1,56% yield, from 1,51%.
FCA, ENEL, INTESA, GENERALI: SHOCK THE EXAMINATION
At the center of attention, in Europe as in the USA, the quarterly data.
Piazza Affari is no exception. We begin today with the half-yearly reports of Caltagirone Editore, Italgas, Nexi, Brembo, Inwit, RaiWay, Cir and Cofide.
Wednesday will be the turn of Fiat Chrysler and Banca Intesa as well as Banca Mediolanum and Generali.
Thursday will be the turn of Enel. Unipol, UnipolSai, Atlantia, Ferrari and Safilo closed the week.
DECISIVE DAY FOR PROJECT ITALY
Today the preparatory work of Progetto Italia could be completed, the plan to relaunch the large constructions on which Cdp and Salini Impregilo have worked, just in time to be presented to the board of tomorrow's company. The operation goes beyond the rescue of Astaldi, which will have to present the plan to the Court of Rome by Wednesday.
ON WALL STREET IT'S APPLE TIME
The earning season of US companies also continues. After Friday's exploits by Alphabet (+10% following the announcement of a 25 billion dollar buyback), Apple's accounts will dominate the scene: analysts are questioning the performance of service activities and the possible recovery of the iPhone in China. A request to Washington to exempt some Chinese-made components from duties was rejected by the administration.
Apart from the Apple, 170 companies in the S&P500 index will give the numbers. These include: Eli Lilly, Merck, Pfizer, ConocoPhillips, Apple, General Electric, Spotify, Qualcomm, Verizon, General Motors and ExxonMobil.
