The currency earthquake, for now, seems over. This morning the Central Bank of China set the parity of the yuan against the dollar at 6,3975, or 0,05% more than on the eve. But the effects of the devaluation in stages (-3% in the week) are being felt. The markets are trying to understand what the impact will be on Chinese growth, on world trade prospects and, last but not least, on the Fed's next choices: the strengthening of the dollar against the yuan could suggest postponing the rate hike.
Against this backdrop, amplified by the mysteries that still distinguish Chinese power (see the censorship surrounding the Tianjin port disaster), the Asian stock exchanges closed the week in the name of uncertainty. Tokyo closes down by 0,2%, Sydney -0,1%, Hong Kong +0,2%. Only Chinese stocks end the week with a plus sign, thanks to Monday's rise.
DOLLAR CURRENCIES LANDSLIDE, CRUDE AT THE MINIMUM
All Asian currencies were down against the dollar: yuan -2,8% on Monday, Indian rupee -1,8%, yen -0,2%. The biggest loss is the Malaysian ringgit -5%. Also noteworthy is the tumble of the Turkish lira (-1,6%) over which the possibility of early elections hangs.
The effects on commodities are also heavy. WTI crude oil slipped to $42 tonight, the lowest price since March 2009. Brent is back below the $50 a barrel barrier.
WALL STREET IN STALL, MILAN AT THE TOP
American stock markets are also uncertain: S&P 500 and Dow Jones -0,2%, the Nasdaq unchanged. The price lists of the Old Continent are much more dynamic.
The Milan Stock Exchange rebounded, recovering part of the decline of the last two days: Ftse Mib index +1,6%. Paris +1,1%, Frankfurt +0,7% and Madrid also performed well. The London Stock Exchange did not participate in the mini rally - -0,1%, the most sensitive to the raw materials sector. During the morning the positive variation was larger, but it narrowed after the lackluster opening of Wall Street.
FINAL SPRINT FOR GREECE, THE NUMBERS FROM EUROSTAT ARRIVE
This morning the market spotlight will shift to the Eurozone. Eurostat data on the trend of European GDP in the second quarter are arriving (forecast +0,4%), all the more eagerly awaited after the publication of the minutes of the July meeting of the ECB which revealed a certain disappointment for the weak recovery of the economy.
The monitors will also be tuned back to the Greek Parliament. In fact, by noon, the deputies will have to approve or not the agreement signed by Alexis Tsipras with creditors, so that, in the early afternoon, the meeting of the Eurogroup can be held by videoconference which will give the go-ahead (after consulting various parliaments , starting with Germany) to the 85 billion aid package. There is no shortage of obstacles in this race against time. In Athens yesterday it took more than nine hours of bitter quarrels and protests to overcome the preliminary objections of the Syriza left, supported by the speaker of Parliament, Zoi Kostantopolou.
BTPs MORE TRANQUIL, THE BANKS GO UP
The recovery of the Piazza Affari was driven by the rebound of the banks, which benefited from the newfound tranquility of the bond market. After closing on Wednesday at 120 basis points, the yield differential between the ten-year Italian and German benchmarks narrowed to 116 basis points. In particular, the performance of Mediobanca +3% and of the Popolari: Banco Popolare +3,5%, Bper +3,3%, Bpm +2,65%. Unicredit +1,2%, Intesa +1,7% and MontePaschi +2,7% are also on positive ground.
In managed Azimuth +3%. Anima holding also rose +2,83%, after Kepler Cheuvreux resumed coverage of the stock with a buy rating and a target price of 10,5 euros, with a double-digit profit growth forecast over the next few years. Generali +1,3%, Cattolica +1%. The best sector of the Eurostoxx yesterday was that of cement and construction. In Milan Buzzi closed with an increase of 5,1%, winning the title of best blue chip of the day. Exane Bnp Paribas raised the target price to 21,5 euros from 20 euros, confirming the Outperform rating. ?
LUXOTTICA STARTS AGAIN: THE WEAK YUAN IS NOT A DAMAGE
On the luxury front, the rescue has come Luxottica +4,2%: analysts are realizing that the devaluation of the yuan is not a big damage for the eyewear giant. Indeed, the group has a strong cost base in the Land of the Dragon, so the decline in the yuan causes a reduction in expenses.
It also advances Yoox +4,5%, dragged upwards by the accounts of the German competitor Zalando. Well tuned also Moncler +1,7%. Less brilliant was the recovery of Ferragamo +0,6% after the massive losses of the previous days. Tod's closes again in the red -0,3%.
BUZZI BEST TITLE
The best sector of the Eurostoxx yesterday was that of cement and construction. In Milan Buzzi closed with an increase of 5,1%, winning the title of best blue chip of the day. Exane Bnp Paribas raised the target price to 21,5 euros from 20 euros, confirming the Outperform rating. Astaldi +7,2%, set a new historical record. Among industrialists, Prysmian shines +3,7%:
Finmeccanica also did well +2,4%. Moody's gave the company a Stable rating in light of improved profitability.
CNH Industrial +1%. Goldman Sachs has raised the target price to 8,90 euros from 8,10 euros. The judgment remains neutral.
Fiat Chrysler Automobiles gained 1,3%. The devaluation of the yuan will not have a significant impact on the 2015 profits and revenues of European automakers, Fitch writes.
HSBC AWARDS ENEL. THE RALLY OF SARAS STOPS
Also noteworthy: Enel +1,7%. HSBC raises the target price to 5 euros from 4,80 euros, confirming the Buy judgment. Eni gains 1%, Saipem -1%. Saras closed down by 2,5%, reversing the initial trend that had pushed the quotation to new highs since January 2009 at 2,47 euro.
