We leave this morning for the dreaded journey to unknown lands. The second coming from the Greek ballot box calls into question the philosophy on which European politics has developed, brick by brick, since the outbreak of the crisis.
The first reactions of the Asian markets suggest, as expected, a day of high tension. Tokyo loses 1,6%, Sydney 1,3%. Bond yields are under tension: the Australian 2,932-year bond rises to 2,4%. In Europe, however, at the opening the price lists lose but do not collapse: Milan -1,3%, Paris -1% and Frankfurt -XNUMX%.
The euro fell (-0,7%) against the dollar to 1,1042 but recovered following the resignation of Yanis Varoufakis from the Greek government. Oil falls sharply: Brent below 60 dollars a barrel.
Instead, the Chinese stock market holds, the second potential hotbed of crisis. Thanks to the interventions to defend the market this morning, Shanghai advanced by 3% after a pyrotechnic start at +7,8%.
FRANCE OPENS IN ATHENS, CLEARLY NOT FROM BERLIN
The shock for the Greek vote runs through all the capitals of the European Union. French Economy Minister Emmanuel Macron has spoken out for the immediate reopening of negotiations with Athens, but his voice seems to be an isolated voice. From Berlin, the first official reaction came from the social democratic deputy premier Sigmar Gabriel: "Tsipras – he said – destroyed the last bridge that could connect Greece and the European Union". Angela Merkel will meet François Hollande in Paris during the day.
ON THE BANKS THE BALL PASSES TO DRAGONS
The first, crucial game will be played this morning at the ECB. It will be up to Mario Draghi to decide whether and how to extend aid to Greek banks. For the Central Bank, after the no in Athens, it will be difficult to resist the arguments of Jens Weidmann, governor of the Bundesbank, according to which the collateral of Greek banks to guarantee loans has already lost all value for some time.
Mario Draghi, however, could avoid asking for the repayment of Ela loans for now, an act that would have the effect of accelerating Grexit. As already happened in 2012, the banker will ask the heads of the various European institutions whether they intend to take charge of Athens' guarantees or not.
The next key date will now be July 20, when 3,5 billion in EU loans to Athens will expire. If there is no agreement by that date, Greece will default, but it will not be expelled from the euro for this. Athens will enter a sort of limbo, characterized by double monetary circulation, with the introduction of a currency for internal use.
A RIVER OF LIQUIDITY SAVE SHANGHAI
As for China, it starts again from a landslide of 28% since last June 12th. The Shanghai index lost 5,84% on Friday. Over 3 trillion dollars have gone up in smoke in the last month, more than the stock market capitalization of Italy, France, Russia, Mexico, India and Australia combined.
Over the weekend, Beijing hastily set up an anti-panic barrier with a series of measures: a) stop IPOs on the Shanghai and Shenzhen lists, accused of draining all available liquidity. 28 freshmen have already withdrawn on Saturday alone; b) creation of a fund made up of 21 primary companies (both public and private) to support blue chips, along the lines of what was done in 1997 in Hong Kong during the Asian crisis; c) the fund has limited firepower (19,3 billion dollars) but has the backing of Beijing; d) Finally, on Sunday evening, the news arrived that Beijing was ready to guarantee the necessary liquidity to the market, thus making today's rebound possible. The question is to understand what the effectiveness of these measures will be over time.
ECB IN THE FIELD IN DEFENSE OF BTP AND BONOS
The auctions of the Italian Treasury will be regular even in the presence of a crisis due to the Greek situation, assured the director for public debt of the Treasury Maria Cannata. “We are going regular – she guaranteed – We went to auction in much more complicated situations, even in November 2011″. So far, however, the damage has been contained. But today a difficult day is looming for the government bonds of the periphery of the eurozone, the most exposed to the tremors of Athens.
The next Italian issues are already scheduled for the week: one-year BOTs on Friday 10th, BTPs next Monday). The Treasury faces the test after having collected over 60% of the issues envisaged for the entire year, at interest rates that remained very low until the end of the month, when, in the wake of the announcement of the referendum, the yield on BTPs it jumped (from 0,85% to 1,25% for 5 years and from 1,83% to 2,35% for 10 years).
The market restarts after the massive flight of international investors from the market: in the last month money market funds liquidated positions for 6,1 billion dollars, the most serious haemorrhage since July 2013. In the same period ETFs in the sector fell divestments of more than $3,2 billion.
The ECB's decision to include a series of Italian securities (Enel, Snam, Terna, Ferrovie) among the possible purchases of Qe has given wings to the sector with strong purchases of corporate bonds, even those not directly affected by the measure.
BUSINESS PLACE STARTS AGAIN AT -5,4%
The effects of the Greek crisis heavily affected the equity markets in the past week. The Eurofirst index of the top 300 listed European companies fell by 3,5%. In Milan, the FtseMib index fell by 5,43%. Since the beginning of the year, the increase has been reduced to 18,4%.
In Piazza Affari today Brembo's extraordinary dividend (0,2 euro). Trevi (€0,07) and Compagnia della Ruota (€0,026) also pay the coupon.
MONTE PASCHI
Bringing up the rear of the list in the past week was Banca Monte dei Paschi (-11,9% last week), under pressure from the prices of government bonds. The institute's board of directors confirmed the assignment to Ubs and Citi to identify the possible partner according to the indications of the ECB. Meanwhile, the race for the chair of president to replace Alessandro Profumo, who will leave office on 6 August, is accelerating.
FCA ATTACKING BRAZIL HOPES IN SUZUKI
Fiat Chrysler in great slowdown (-8,7%). The difficult situation on the Brazilian market (-27% compared to a year ago) weighed on the group's performance. Sergio Marchionne, in this regard, said he expects a recovery by the end of the year. At that time the group will probably have completed the Ferrari IPO, valued at at least 10 billion.
"It's early to discuss it," replied the CEO of the group to a question on the prospects for an eventual conclusion of the arbitration between Suzuki and Volkswagen which could open the door to an alliance with the Japanese company.
TELECOM, FIRST CONTACT WITH VIVENDI
The first official meeting of the Telecom Italia board will be held on Wednesday with a representation of Vivendi, headed by the CEO Arnaud de Puyfontaine. The delegation could then be received at Palazzo Chigi.
