Milan confirms itself pink jersey of Europe, on a day of little satisfaction for the world stock exchanges. After a positive start, the main stock exchanges on Wall Street are also around parity or slightly below. The Ftse Mib closes at +0,84%, thanks to the banks, Fiat and Stmicroelectronics (+10,37%) which, in the aftermath of a good quarterly, unleashes the bull.
Bank Mps is recovering, after days of rollercoaster, today scores a balanced +1,3%, bringing the value of the shares over 27 cents. The popular soon-to-be brides are brilliant: +4,29% Bpm, +3,08% Banco Popolare. Popular good Emilia Romagna: +2,36%. Banca Mediolanum recovers, +1,58%, positive Intesa +1,57% and even more Unicredit +2,76%. Another boom for Fiat Chrysler Automobiles (+6,04%), two days after the quarterly data, as well as on Unipol (+1,47%) and Unipolsai (+1,22%). Yoox Net-A-Porter Group nibbles a few decimals, while, still in the fashion sector, Moncler falls -0,64% and Salvatore Ferragamo stands out +1,34%. Among the stocks with a minus sign we also find Saipem -2,59%. The other oil companies recovered: Eni +1,55% and Tenaris +1,3%.
From the European front: the most tonic is London, with the FTSE 100 growing by almost half a point, also thanks to a better-than-expected rise in GDP in the third quarter, in spite of any Brexit effect.
After the first lines DJ, Nasdaq and S&P 500 slide towards parity or into the red, nervous and uncertain, overwhelmed by quarterly reports and on the basis of conflicting macroeconomic data, with initial claims for unemployment benefits worse than estimates and a slight decline in durable goods orders above estimates. On the other hand, the US real estate market is growing again, with a rebound in home sales in progress.
Sovereign bonds deserve a separate chapter, where the sell-off continues in the Eurozone, with no significant differences between core and periphery. European bond yields recorded declines of around ten basis points. The BTp/Bund spread remains stable at 143 basis points but the yield on Italian ten-year bonds jumps to 1,61%, to levels not seen since mid-February. The yield on German Bunds also marks the highest value since last May.
As regards the Semi-annual bots, allocated for 6 billion in today's placement, yields decreased to -0,295%, down by 4 cents compared to the previous auction. A figure that updates the all-time low marked on 27 May (-0,262%). Good demand, at 9,627 billion euros. The supply/demand ratio was 1,60, down slightly from the previous month's levels of 1,73.
The yields of the BTPs that the Treasury will offer tomorrow at auction are expected to rise significantly on both 5 and 10-year maturities. This was affirmed by the operators interviewed by Il Sole 24 Ore Radiocor Plus. The 5-year BTp was placed last month with a yield of 0,28% while today on the secondary market it travels at yield levels close to 0,50%. “For tomorrow – says a trader – the five-year is likely to come out at these levels. The same applies to the 10-year BTP which in the September auction was issued with a gross rate of 1,21% and which now fluctuates at higher yield levels, over 1,50%”. The rise in yields, operators explain, is due both to pressure on the supply side and to the increase inuncertainty for the Italian political scenario due to the approaching referendum on constitutional reform.
If Athens mourns Sparta does not laugh. Treasuries also remain subject to sell-off on the back of global sovereign bond performance: the yield on the 10-year US bond reached the intraday highs of last June 2nd. The explanation should be sought in the solid British GDP and in the comments of the governor of the Bank of Japan. Haruhiko Kuroda explained that the Japanese central bank will not try to push down yields on long-term bonds even if they rise further and speaking to Parliament he made it clear that next week it will not announce new monetary stimuli. The focus in the US today will be on the auction of seven-year bonds for 28 billion dollars.
On the monetary front, there is an observation by the Italian economy minister Pier Carlo Padoan according to which the markets have begun to "incorporate a new normality in which monetary policy fails to revive growth and employment". “Despite efforts in Europe – Padoan argues – economic prospects remain weak, unevenly distributed and exposed to significant downside risks. The recovery remains significantly below expectations formulated on the basis of past experiences. We find ourselves in a new context, characterized by a preference for savings and low investments".
Also for the governor of Bank of Italy Ignazio Visco the international economy is still dominated by "conditions of uncertainty" and inflation in the euro area is "still excessively low", in Italy the recovery "has not been interrupted but remains sluggish". Investments remain "the main weakness", even if the Italian GDP should have returned to growth "slightly" between July and September. According to the governor, the exceptionally expansive monetary policy of the ECB "cannot be the only lever" to support aggregate demand. In the absence of a European public budget to be used in an anti-cyclical key, "we need policies capable of influencing, in a scenario of great changes, the structural characteristics of our economies".
Euro recovering against the dollar today (+0,30%). Even if the greenback remains invigorating and touches, in the early afternoon, a session high of 104,83 against the yen. Brent appreciates by almost a point and a half.
