While waiting to decipher the next chapters of the Italian crisis and the increasingly dramatic prospects of a no-deal Brexit, the financial markets face a week that promised to be calm in the light of August XNUMXth and other holidays (today the squares of Tokyo, Singapore , Malaysia and the Philippines) but threatens to be hot, if not scorching.
Beyond the European crisis hotbeds, Goldman Sachs is fueling pessimism this morning: there will be no agreement between the US and China before the vote at the end of 2020, reiterates Ian Hatzius, the Bank's chief economist. The stalemate will have a significant impact on the US economy with the result of reducing growth to 1,8% from the 2% already estimated. The Wall Street Journal dedicates a long article to what, until a few weeks ago, would have appeared a heresy: the possible drop in T Bonds (today 1,74%) below zero.
Not even the opening of the Financial Times inspires confidence: the investment banks, reports an investigation, are cutting 30 jobs in the face of falling profits.
Despite the negative signals, however, Asian stocks opened cautiously higher this morning.
The Csi index of Shanghai and Shenzhen gained one percentage point. The boost comes from the lighter margins required for price list purchases. Up also Taiwan (+0,2%), the Korean Kospi (+0,4%). Sydney's S&P ASX 200 -0,2%.
CATHAI (-5,3%) FIRES PROTESTING PILOTS
In parity Hong Kong, where the thud of Cathai Pacific stands out (-5,3%): the company, under pressure from Beijing, fired three employees guilty of having sided with the demonstrations involving the former British colony.
Currencies moved little. The dollar-yuan exchange rate trades at 7,06. The yen, the safe haven currency of Asia, appreciated at 105,5.
Gold trades just under $1.500 an ounce, consolidating last week's gains (+3,8%).
Brent oil down 0,2%, to 58,4 dollars a barrel: despite the recovery on Thursday and Friday, North Sea crude finished the week with a sharp drop (-5%).
EURO STABLE, STERLING UNDER FIRE
Despite the tensions in the Old Continent, the euro remains stable at around 1,20 against the dollar. This morning it is at 1,121, up 0,1% against the dollar.
The pound is still under fire, trading at a low of 1,2015 against the dollar, at the levels reached at the beginning of 2017.
BTPs START FROM 1,82% AGAINST 0,26% OF SPANISH BONOS
However, the attention of operators is concentrated on Italy. A new hot day is looming for Piazza Affari, waiting for the developments of the political crisis which is destined to weigh on all financial markets, especially those of the Eurozone. After blow on Friday (Stock market -2,5%, spread at 241, up 43 points in just two sessions) operators are waiting, without too many illusions, for the day to provide some indication on the modalities and timing of the crisis which could (but it is all nothing but obvious) lead to early voting: the first move is up to the president of the Senate, who has summoned the group leaders to decide the date on which the hall of Palazzo Madama will be called to listen to the Prime Minister Giuseppe Conte and to vote on the no confidence presented by the League in favor of an immediate vote, as well as Silvio Berlusconi (but not all of Forza Italia), the Brothers of Italy and Nicola Zingaretti (but not Matteo Renzi). Grillo has given the line to the Five Star Movement. But the role of President Sergio Mattarella will be decisive.
FITCH LEAVES RATING UNCHANGED, NEGATIVE OUTLOOK
In the meantime, Piazza Affari will have to face another day of high tension. In the trenches the BTPs, on Friday rose to a yield of 1,82% in contrast with the whole Eurozone: from the Bund, which slipped to -0,58% close to the negative record, to the French Oat (-0,26% ), Portuguese Bonds (0,29%) and Spanish Bonos (0,26%), despite the difficulties in setting up a government and passing the provisional exercise. But in Madrid, no one questions the respect of community bonds.
In this context, the Treasury, which in 2019 has already collected 284 billion euros, will have to collect another 125 by the end of the year.
The rating agency Fitch didn't make it worse, keeping the vote on the reliability of our debt (BBB) unchanged on Friday evening, but confirmed all the doubts about the economic situation (+0,1% GDP in 2019, +0,5% in 2020), warning against the adoption of the Flat Tax which would worsen the deficit by 0,7% of GDP.
BANKS UNDER FIRE, ONLY ATLANTIA SHINES
No less tense is the opening of the stock market; On Friday, bank stocks paid the highest price, starting with Banco Bpm (-8%), Ubi (-7,9%) and Bper (-6,6%).
To be followed, for opposite reasons, Atlantia (+2,9%). The crisis blew up the Council of Ministers which, according to the Five Stars, should have approved the revocation of the concession on Autostrade.
GERMANY'S GDP COMING SOON: -0,1% EXPECTED
In addition to the Italian case, the market's attention will focus on the German economy. The confidence index, the Zew, will be published tomorrow. But the main appointment is the publication, on Wednesday, of the GDP data for the second quarter of the Federal Republic. Also on Wednesday, Brussels will also announce the growth data for the Eurozone.
The forecast is that Germany has slipped into negative territory (-0,1%), as has already happened to the United Kingdom (-0,2%). A new signal for a robust intervention by the ECB at the end of the summer, the last of Mario Draghi's season.
Outside of Europe, the distance comparison between the USA and China on tariffs always holds the scene. And the barrage of insults that President Trump reserves for the heads of the Federal Reserve continues "Powell - he said - he must cut the cost of borrowing by at least one point by the end of the year".
ACCOUNTS OF ALIBABA, HISTORIC DAY FOR ARAMCO
On Wall Street, attention will be paid to the accounts of Wal-Mart and the Chinese Alibaba.
But a historic novelty is upon us: the first conference call of Aramco, the Saudi Arabian oil giant, will be held this morning, an opportunity to have official numbers on the energy giant's profits and investments as well as the first step on the road to IPO of the century which, according to what was anticipated by the oil minister Khaid Al Falih , is scheduled for 2020 (or 2021). Aramco has already placed $100 billion in bonds in recent months.
