The Federal Reserve, as expected, raised rates by a quarter of a point for the third time in 2018. The central bank also removed from the final statement the adjective "accommodative" referring to monetary policy in use since the days of Ben Bernanke. Governor Jerome Powell explained that there is no longer any need, in the face of such a thriving economy, to reiterate the concept: the data give hope for three years of growth. The Fed chairman, answering a question at the press conference, stressed that "policy does not play a role in the Federal Reserve's decision-making process", and that "he has been mandated by Congress to do an important job to the Americans and the tools to do it”. A curt reply to Donald Trump that yesterday he criticized the rate hike again. But the US president yesterday took it out especially on China, accused of wanting to interfere in the US elections and on Europe, which is too soft on Tehran.
Indeed, there has been no shortage of "dovish" note in central bank communications. The select committee that oversees monetary policy has signaled that it currently expects only three increases between now and the end of 2019 (the next one, probably, as early as December), against the four already planned by the markets. This explains why the banks, the most sensitive to the trajectory of interest rates, reversed course in the last part of the Wall Street session.
GOLDMAN SACHS BRAKES, THE BOND WITHDRAWS
The Dow Jones index lost 0,4%, the S&P500 0,33% (from +0,5% in the first part of the session. Nasdaq -0,21% Among the worst, in the basket of blue chips, Goldman Sachs (-1,5%).
Communications from the Federal Reserve have reinvigorated the bonds: the yield on the 3,05-year Treasury bond of the United States has moved away from the highs for the period, on which it had reached at the beginning of the week, this morning it reached XNUMX%.
The dollar appreciated slightly, this morning the euro-dollar cross is at 1,175.
RECORD IN ASIA IN KOREA, THE YEN BRAKES TOKYO
Asian stock markets also performed well: the Asia Pacific index +0,3%, Seoul +0,4% marks a new high. Hong Kong -0,5%. Tokyo -0,7%, after reaching the record of the last eight months, folded in the final due to the rebound of the yen from the lows of the day. The automotive sector is doing well: the risk of US duties seems to have subsided.
OIL DOESN'T STOP, SAIPEM FLIES
During the night oil again took the upward path, this morning on Asian markets it traded at 82,22 dollars a barrel, on the highs of the last four years.
US reserves rose for the first time in six weeks last week, but the depressive effect on crude oil prices was short-lived as Energy Secretary Rick Perry scaled back the expectations of those expecting a short release of part of the strategic reserves.
Still rallying in Piazza Affari Saipem: +0,5% to 5,33 euros, the highest since January 2017. Eni +0,3%. Tenaris -0,9%, bought 47,8% of Saudi Steel Pipe, a Saudi pipe producer, for 144 million.
MILAN FLAT AWAITING THE MANEUVER
Slow closure for Piazza Affari and the other European stock exchanges on a day experienced in a climate of anticipation for the FOMC meeting. The Italian Stock Exchange is an exception, still a battleground between the yellow-green majority and Minister Giovanni Tria, awaiting time X on the public accounts.
On the eve of tomorrow's Council of Ministers on the new public finance framework, the Lega and Movimento 5 stelle are oriented to press the Minister of Economy so that the 2019 deficit is set at 2,4 percent of GDP. But Giovanni Tria reiterated that the government will give the financial markets a "signal of stability" by presenting the new deficit and debt targets tomorrow. "If you ask too much what you gain [by raising the deficit] you lose in higher interest" on the debt, warned the Economy Minister.
S&P Global Ratings has meanwhile cut its 2018 growth estimates from 1,3% to 1,1% and from 1,2% from 1,1%. for 2019.
In Milan, the index lost 0,1% to 21,646 points. Flat Frankfurt (+0,09%); Madrid +0,33%, Paris +0,61%.
MURDOCH BIDS A LATEST GOODBYE TO SKY
London +0,14%. After losing the race to Comcast to take totalitarian control of Sky, Rupert Murdoch has decided to also sell the 39% stake held by 21 Century Fox in the satellite operator for £11,9 billion. Fox stock rose 1,02% on Wall Street, Walt Disney did even better, +1,39% who will buy Fox for 71 billion dollars.
SPREAD TO 230. TODAY LIGHT AUCTION FOR BTPs
On the debt front, it was a positive session, awaiting enlightenment on the maneuver and today's auctions on medium-term securities.
After a low of 226,8 basis points, the spread closed at 230 cents. The yield of the 10-year BTP is 2,83%.
At 11, the Treasury will offer 2 billion Btp 5 and as many 1,25-year bonds together with CctEu for 2019 billion. A "light" request because it is a blind auction: at that time given that the government has not yet put the debt ceiling on paper for XNUMX.
Yesterday evening on the secondary on October 1, 2023, the five-year coupon of 2,45% yielded 1,999% from 2,4% (record since December 2013) of the last auction, while the ten-year December 2028 yielded 2,84% from 3,25 (high since March 2014) at the end of August.
THE 5G SVENA TELECOM ITALIA AUCTION
Highlights in Piazza Affari Luxottica (+2,01%) and Pirelli (+1,38%).
Bringing up the rear was Tim (-2%) on slightly above-average volumes, weighed down by the evolution of the race for 5G frequencies: The ninth day of bidding closed with a total amount of offers at 5,15 billions, more than double the minimum revenue set in the budget law for 2018.
Stm -1,64%: despite the Deutsche Bank upgrade, the negative reports on the sector coming from Wall Street pay.
THE MEGA MERGER DOES NOT WARM UP UNICREDIT
Overall negative banks, but without particular movements pending the manoeuvre: the Italian basket suffered a drop of about one percentage point compared to +0,1% in the European sector. Unicredit loses ground (-1,3%), even though it is at the center of rumors about a major merger next year. The other big, Intesa, loses 1,5%.
Of note is Credito Valtellinese (+2,6%): the institution has received authorization from the Bank of Italy to use the A-IRB internal models for measuring credit risk for exposures to businesses and retail .
AUTOGRILL SKIPS BEFORE COUNTING
In the Benetton galaxy, Autogrill sells 3,3% on the eve of the results. Atlantia -0,7%, now impervious to the constant declarations of politicians, in particular on the subject of revocation of concessions.
Salini Impregilo drops by 1,9% in the wake of the hypothesis of cancellation of the tender for the third crossing point in Genoa.
Among the minor stocks, Conafi jumps +22% after the accounts.
