After the elections, Italy has changed. And analysts, armed with this single certainty, have been trying to understand since yesterday evening the possible routes after the vote.
On the foreign exchange front, the affirmation of Cinque Stelle and Lega, both perceived as anti-euro forces, favored the weakening of the single currency, which slipped to 1,2228 against the dollar. But the dollar was held back by the weakness of the US currency, traded in Tokyo at 105,5.
On Friday, the ten-year BTP closed at a yield of 1,90%, spread stable at 134. It is not excluded that the picture that emerged from the vote (the most common comment speaks of "messy", or confusion) could cause a limited flow of sales on the Italian paper, accentuated by the parallel recovery of the Bund, favored by the imminent birth of the government of Angela Merkel. But the situation, thanks also to the ECB, does not give cause for concern. At least in the short term.
THE ANALYST: VOLATILITY UNDER CONTROL, LESS STRONG IN EUROPE
The first comments by analysts, in fact, reveal that Italy, lacking a clear political compass, will present itself in a position of weakness at the next, decisive, appointments to redesign the architecture of the single currency, starting with the EU summit on 22 /March 23rd. In short, the risk is to suffer the agreements already outlined by the talks between the French and the Germans.
In particular, it will not be easy to support Italy's reasons for the Banking Union and the request, requested by Germany, to provide for provisions by banks against investments in government bonds.
But nobody foresees a collapse of Piazza Affari. According to Megan Green, an economist at Manulife interviewed by Market Watch, the situation is confused but expected, widely discounted by the markets, so a serious increase in volatility, at least in a political key, is not to be expected. On Friday, in the wake of the US ultimatum, all 21 European sector indices closed down: banking and mining were the worst sectors.
DUTIES, CARS IN THE VIEWFINDER. MARCHIONNE'S ANSWER TOMORROW
Over the weekend the situation became, if possible, even hotter. The European Union has announced a targeted response to the American president's offensive, targeting Bourbon, Harley Davidson and other Made in USA icons. Trump responded by airing sanctions against European cars.
Fiat Chrysler risks being one of the companies most affected: Jeeps and Alfas produced in Italy but destined for the US market will be subject to duties. Tomorrow Sergio Marchionne will speak at the Geneva Auto Show, where the European debut of the new Jeep Wrangler and Cherokee is expected. The spotlights will be on the new industrial plan that Marchionne will illustrate at the Investor Day and on the possible spin-off of Magneti Marelli in the second quarter of 2018.
HONG KONG BRAKES, OIL BOUNCES
Beyond the response of the Italian polls, there is no shortage of strong themes for the markets. In view of the start of the Congress of the Chinese People's Party, Premier Li Keqiang has released forecasts on economic growth for 2018. This year, GDP should mark an increase of 6,5%, last year the government expected +6,5% or more. The party assembly, whose work will end on March 20, will officially sanction the strengthening of Xi Jingping's powers, abolishing the constraints on the president's term of office.
This morning the Shanghai CSI index in Shenzhen rose by 0,3%. Hong Kong loses one percentage point. Down, but less than expected, the other Asian stock exchanges. The Japan Stock Exchange loses 1% in the final session. The yen, considered a safe haven asset, strengthened for the fourth consecutive day against the dollar, the cross is 105,5 at the highest level in the last 16 months. Oil prices are on the rise. This morning Brent traded at 64,67 dollars a barrel (+30 cents), Wti at 61,64.
In the morning, the PMI services indices of the Eurozone will be announced. But the attention of the price lists, as well as the impact of the Italian vote, will be concentrated on the next moves in German politics. The trade conflict with the US is the first emergency that Angela Merkel will have to deal with. of the root causes of the emerging conflicts.
RATES, ECB AND BOJ DO NOT CHANGE COURSE
In this context, the meeting of the ECB directorate will be held on Thursday. Mario Draghi has repeatedly evoked in recent months the threat of a trade war conducted to the sound of competitive devaluations. The market reaction to Trump's blitz justifies fears: on Friday the euro-dollar cross rose by about one and a half points to 1,233.
In terms of rates, a change of course by the Frankfurt institute is not expected, but the president could, with due prudence, anticipate less expansive guidance in the near future.
The decisions of the Bank of Japan are also in the spotlight. Also in this case, no changes of course are expected, but Governor Kuroa could confirm the forthcoming reduction in Qe's planned purchases.
The meetings of the central banks of Australia and Canada should also be followed.
THE FED TOWARDS THE FIRST INCREASE: PAYROLLS +2,8%.
The Fed heads into its first monetary committee meeting of the Powell era. The data on the labor market, which has always been the most followed indicator for defining interest rate trends, will be released during the week. According to forecasts, next Friday's survey should signal another 205 new jobs (compared to 200 in January) and the fall in the unemployment rate to 4%. No less important is the trend in payroll: a monthly increase of 0,2% is expected (+2,8% on an annual basis)
TODAY ACCOUNTS OF BREMBO AND SAIPEM. TOMORROW IT'S THE TELECOM'S TURN
The agenda of corporate appointments is very busy during the week. Board meetings are held today on the accounts of Brembo, Cad It, Gedi Gruppo Editoriale, Prelios, Sias and Saipem. Tomorrow it's the turn of the Carige Board of Directors, called to respond to Raffaele Mincione's request for a seat on the board after the purchase of 5,3% of the institute. Also scheduled are the recommendations of Yoox and Ubi Banca.
However, the key event will be the Telecom Italia board which will have to: 1) approve the accounts; 2) pronounce itself on the grid unbundling project; 3) examine the business plan.
On Wednesday there will be the councils of: Brunello Cucinelli; Diasorin, Erg and Iren. Thursday will be the turn of Autogrill, Azimut, Bper Banca, Falck Renewables.
Salvatore Ferragamo's Board of Directors in the spotlight after the resignation of CEO Eraldo Poletto. Finally, Friday closes with Molmed and Txt-Solutions.
