Wall Street's robust reaction to the brilliant data on the job market (235 new posts against the estimated 197) and the drop in oil prices ahead of the US rate hike are the two factors that characterize the start of the first session of the week which coincides with tredesin de mars, the Milanese flower festival.
Indeed, in forty-eight hours, the Federal Reserve will announce the first of the US rate hikes in 2017, which will be at least three, as stated in a report by Goldman Sachs which confirms the expectation of a hike in June and anticipates the third move in September, leaving room for a fourth move in December.
The rise in US interest rates and the consequent strength of the dollar, as well as the increase in US stocks, have in the meantime favored the sharp drop in oil: this morning US crude fell below 48 dollars, for the first time since November, Brent just above the $50 barrier at 51, the lowest since December. Last week there was an acceleration in the commissioning of drilling rigs in the United States, according to data from Baker Hughes, they climbed by 8 to 617 total: it is the strongest week's increase since late 2015.
ASIAN BAGS RISE, TURKISH THINGS IN THE NETHERLANDS
The mix of rising rates and pressured oil stocks led to a cautious rise for Asian stock exchanges: the Tokyo Stock Exchange rose by 0,1%. Hong Kong gains 0,9%, Shanghai 0,5%. The Korean stock market rose (+1%) on the day that President Park Geun -hee, affected by the impeachment, left the presidential palace.
It will certainly be a hot week, marked by numerous intersections between finance and politics. On Wednesday 15, the eagerly awaited Dutch elections will be held, animated by the sudden and violent clash with Erdogan. The final sprint involves Prime Minister Mark Rutte and Geert Wilders' Pvv, who promises a referendum to decide whether to leave the EU.
The political temperature of the European Union, already hot for the electoral season, is destined to rise tomorrow, when the British premier Theresa May could activate the article 50, that is the divorce procedure of London from the European Union. The president of the EU council, the Polish Donald Tusk, who has just been reconfirmed (despite the negative vote in Warsaw), has already made it known that Brussels is ready to dictate its conditions within 48 hours. Then a negotiation will open, financial and otherwise, which is not expected to be easy. Friday, spotlight on the meeting of finance ministers and central bank governors of the G20, scheduled in Baden-Baden, Germany. The president of the Central Bank Mario Draghi will also participate on Saturday.
NOT ONLY FED: BOJ, BOE AND BANK OF SWISS MEET
Speaking of central banks, the rate decisions of the Bank of England, Japan and Switzerland as well as Indonesia are also awaited. But the cost of money is pointing upwards everywhere: if US Treasuries are already discounting the rate hike, the reasons for the rise in Eurozone bonds are less obvious despite the confirmations of the ECB's current monetary policy.
In the nuances of Mario Draghi's statements in the press conference after the ECB summit, investors have read signs of possible changes in monetary policy: the yield on the 0,49-year Bund rose to 0,35% from 2,36% last Friday and that of the BTP ten-year to 2,09% from 2,3% (price -XNUMX%).
BTPs GO TO AUCTION TODAY, RATES ON THE RISE
Today's auction of medium-long term BTPs falls within this situation. 3, 7 and 15-year bonds will be offered, plus a part of the September 2046 issue. At the end of Friday's session on the Mts gray market, the new 7-year bond was traded at a yield in the 1,94% area, control' 1,59% of the placement a month ago of the current October 2023 benchmark. On the secondary market, the three-year October 2019 yielded 0,41% against 0,25% a month ago, the 15-year September 2033 was 2,96. 2,53% against the 18% of the share's syndicate launch on XNUMX January.
TRUMP FIRES BHARARA, THE INSIDER TRADING ENFORCEMENT
President Trump fired Preet Bharara, the New York federal prosecutor who has conducted all the investigations against white-collar workers since 2009.
US Treasury Secretary Stephen Mnuchin will ask Congress to raise the federal deficit ceiling. The new budget will allow Trump to finance the increase in military spending (up to 54 billion dollars), while cuts are expected on health care. Strong contrasts, according to media rumors, are taking place within Donald Trump's team on trade policy: the hawks, usually led by Steven Bannon (the fake news strategist) and Peter Navarro are demanding immediate and severe sanctions against China and Germany, to rebalance the trade deficit. Sharply opposed Gary Cohn, the president's chief of staff.
GUBITOSI GOES UP IN ALITALIA, BOD WARM FROM THE SUN
In Italy the changing of the guard in Alitalia stands out. On Wednesday the board will give the first green light to the new business plan and will appoint Luigi Gubitosi to the presidency, sponsored by the banking partners Intesa and Unicredit. The plan provides for a possible 10% reduction in the workforce, currently made up of 12.600 employees. The objective of the plan: to return to profit in 2019 with expected revenues of 3,7 billion and a reduction in costs of 370 million.
ACCOUNTS WEEK FOR THE BLUE CHIPS OF PIAZZA AFFARI
Week full of appointments for the companies of Piazza Affari. Spotlights turned on today on Unicredit's quarterly report, flying on Friday (+3,4%) in the wake of the opinion of Rbs Capital which, after a careful analysis of non-performing loans and their coverage, established that Unicredit's situation is better than that of Intesa.
Numerous appointments of the week for the blue chips of Piazza Affari. Eni's investor day will be held on Wednesday. On the same day there will be the Board of Directors of Leonardo and Poste Italiane. Thursday is the turn of Enel, Generali and Saipem. Board meetings on the accounts of Astm, Cir, Cofide, Eurotech, Gabetti, Ratti and Sias and Tod's are also scheduled today.
VOLKSWAGEN, SHOWDOWN IN SIGHT FOR PIECH
The data arriving from the German companies should also be followed: during the week, among others, the top management of Rwe, Lufthansa and Volkswagen will meet. There will be no talk yet of appointments in this case but, according to Bild, the Porsche and Piech families intend to remove Ferdinand Piech from the supervisory board of Porsche SE, to which the two families have channeled their stakes in Volkswagen. The patriarch of the group accused the rest of the family, starting with the hated cousin Wolfgang Porsche, of having been aware of the diesel anomalies and having hidden them.
The Milan Stock Exchange closed the week in parity. The other European Stock Exchanges also moved little: Paris unchanged, Frankfurt -0,6%.
Even today Il Sole 24 Ore is not on newsstands due to the indefinite strike of journalists demanding the removal of the director Roberto Napoletano, under investigation together with the former president of the group, Benito Benedini, the former CEO, Donatella Treu, and others seven managers in the context of the investigation into the hypothesis of false accounting opened after it was ascertained (and confirmed in the meeting by the president Fossa himself) that circulation in 2015 was 38% lower than that declared by the publisher, whose title it is down 38% from last October.
It seems that Napoletano, who refuses to resign, has proposed suspending himself, a hypothesis rejected by the CDR. The company's board meeting will be held today, chaired by the former president of Confindustria Giorgio Fossa. But no solution can be glimpsed: Vincenzo Boccia continues to defend Napoletano despite growing doubts.
