Volatile session, but finally positive for the European lists which open the second half with fractional increases after the gains achieved in the first half of the year. The trend in manufacturing contributes to push purchases, but also the opening of the ECB to the distribution of profits gives part of banks and insurance companies starting in October and the oil jump. Furthermore, after four sessions down, the shares of the travel and tourism sectors are revived, penalized by the expansion of the Delta variant of the coronavirus that looms over the summer season. The positive start on Wall Street, with the S&P500 pushing past all-time highs, completes the circle of a green day. Piazza Affari appreciates by 0,73% to 25.286 points, while the spread retreats to 104 basis points (-2,5%). Frankfurt +0,48%, Paris +0,71% and Amsterdam +0,25% are on the same wavelength; while London +1,28% and Madrid +1,23% are more tonic.
The trend of manufacturing activity in Europe in the month of June is instilling some excellent results. In Italy the index is confirmed close to record levels (62,2 from 62,3 in May), in Spain it hits a 23-year high at 60,4. In Germany the indicator rises to 65,1. The eurozone as a whole rises for the fourth consecutive month to an absolute top, 63,4, from 63,1 in May. In the US, on the other hand, one looks above all at the data on unemployment benefits, on the eve of the important report on employment. Requests dropped last week to the lowest level since the beginning of the pandemic (-51 thousand, for a total of 364 thousand). Layoffs fell to a 21-year low in June.
In this context i US government bonds prices are falling and yields are rising, waiting for the June employment report to provide clues on the Federal Reserve's next monetary policy choices. The benchmark 10-year yield, which fell to its lowest level since June 21 at 1,438% on Wednesday due primarily to quarterly and month-end demand, was up 2,13% to 1,475.
The scent of robust economic recovery intoxicates oil, on the day of the OPEC+ meeting to assess production for the second half of the year. The September 2021 Brent contract is up by more than one and a half points around 75,75 dollars a barrel; even Texan crude, August 2021, goes over 75 dollars a barrel (+2,3%) as it hasn't happened for three years. During the session, it also reached $76,22, the highest since 2014.
Just over a year ago, WTI futures fell negative for the first time in history, during the height of the coronavirus crisis. Recently, Bank of America said that the price of oil could return above $100 a barrel thanks to increased demand. On the foreign exchange market the euro rears its head against the dollar, but the cross remains crushed below 1,19. In Piazza Affari, the banks and oil stocks are toning and leading the blue chips is Unicredit +2,51%, which issued a 1 million Additional tier 750 bond which makes the institution's capital structure more efficient.
The banking sector rears its head after the sales on the eve thanks to the words of Christine Lagarde, in the European Parliament. The Systemic Risk Board, said the president of the ECB, "reiterated that if the economic and financial conditions do not seriously deteriorate, our recommendations on the restriction of distributions" of dividends to activated banks "during the Covid-19 pandemic could reach expiring at the end of September 2021”.
The statement was later confirmed by the president of the Banking Supervision of the European Central Bank, Andrea Enria, while also Ivass, which presented the annual report on 2020, announced that it will not extend the stop on dividends. Banco Bpm also performed well +1,73%. Against the trend Monte Paschi, -0,39%. Yesterday the bank sent the European authorities a hypothesis on the timing of the recapitalization, putting the operation on the agenda by March-April next year in case a "structural solution" is not found. In pole position Leonardo +2,32%, which has drawn up a memorandum of understanding with Tinexta, a company active in digital trust and cybersecurity services, to collaborate on projects in the field of industry 4.0 and for the data security of the country's production system
Following in oil stocks: Saipem +2,06%; Eni +1,85%; Tenaris +1,92%. Instead, the rebound of utilities stopped, with Enel limiting gains to 0,22%. The black jersey goes to Unipol -1,89%, after yesterday's leap. Buzzi -1,39%, Ferrari -1,32%, Diasorin -1,25% fall back. Outside the main basket, Juventus rises by 0,49%, after the confirmation of the capital increase of 400 million and the words of the president Andrea Agnelli according to which "It is important that Juventus and its shareholders, as has always been the case in our history support the growth and development of society”. The session is brilliant on the Italian secondary: the spread between Italian and German ten-year bonds falls to 104 basis points and the BTP rate falls to +0,8%.
For Prime Minister Mario Draghi, the Italian economy has worked below its potential for much of the past decade and there is therefore plenty of room to use expansionary fiscal policies before creating inflationary pressures. Speaking at the Accademia dei Lincei, the former president of the European Central Bank (ECB) defined a further phase of debt growth, both public and private, as "very probable", saying he was ready to intervene "with conviction" in case there was a worsening of the pandemic such as to cause damage to the country's economy.
Meanwhile, Reuters writes that, according to a spokesman, the European Central Bank has planned "several meetings" over the next few weeks between monetary policy makers, attempting to settle differences on the new inflation strategy.
