“I think the dollar is too strong. It's partly my fault, because it's the effect of the trust people have in me”. He words of Donald Trump in an interview with the Wall Street Journal. It is not the only novelty of Trump thought. The president also expressed his appreciation for Janet Yellen, which is by no means over. "I will decide whether to confirm it or not" in February, when the mandate expires. Meanwhile, Trump lets the Fed know that he "likes low rates." In short, the President is also changing his tone in economic policy as has already happened with foreign policy. Secretary of State Rex Tillerson had a very acrimonious meeting with Vladimir Putin on Syria yesterday in Moscow. And on North Korea, Trump himself tweeted, "President Xi Jingping called me with whom I had a very good conversation about the Korean threat". The list of friends and enemies must therefore be updated.
ABE FEARS THE LAUNCH OF GAS FROM KOREA, CHINESE EXPORTS BOOM
The echo of Trump's comments was felt in Asia, balancing tensions over the Korean crisis. Some of the stock exchanges are closed for holidays. Pyongyang has announced that "something big must be expected for tonight". Japanese Prime Minister Shinzo Abe said Korean missiles could be loaded with sarin.
The dollar falls (-0,55%) after Trump's words. The Tokyo Stock Exchange was also down (-1,1%) under pressure from the yen. The cost of CDSs on South Korea rises to a 10-month high but the Seoul Stock Exchange holds firm after the central bank's decision to keep rates unchanged. Chinese price lists rose slightly. In March, imports rose by 20,3%, above estimates. Exports rebounded to +16,4%, from -1% in February. The yuan rose (+0,2%) after Trump's words averted the risk of a currency war.
WALL STREET HONEYMOON WITH THE PRESIDENT ENDS
Uncertainty also prevailed on Wall Street: the Dow Jones closed down 0,3%, the S&P 500 (-0,38%). Finally, the Nasdaq closed down 0,52%. The indices fell below their 50-day average, a sign of loss of momentum not seen since November.
Wall Street is struggling to find a key to understanding the many turning points of the president, who is about to celebrate 100 days in the White House. There are signs that the honeymoon between the markets and Donald Trump is over. The yield on the 10-year Treasury Bill is at 2,22%, on the starting levels of the November election rally. The trend in the price of gold, which rose 0,9% yesterday to 1.286 dollars an ounce, also shows that risk appetite is rapidly declining.
On the other hand, the main indicator of volatility, the Vix, rose sharply in the fourth session: +5,8%. The financial sector lost 0,9% on the eve of the accounts of JP Morgan and Citigroup. Wells Fargo also lost ground after Warren Buffet announced that he had sold a large part of the shares in the bank with the aim of falling below 10%.
PAUSE FOR OIL. TENARIS ASCENT, THEN BRAKES
After some ups and downs, oil fell by 0,3% in the evening, with Brent at 55,9 dollars. Wti at 53,1. It is the first decline after seven upward sessions. The EIA said weekly inventories fell by 2,17 million barrels, higher than estimates.
Among the Italian oil stocks, Eni closes unchanged on the eve of the budget meeting. Tenaris loses 1,9% despite the promotion of Mediobanca which raised the rating to Outperform. In the morning, the shares of the Rocca group had shot up after the US Department of Commerce increased anti-dumping duties on producers of pipes for the South Korean energy sector. Saipem - 0,9%. Also noteworthy is the drop in Maire Tecnimont (-3%) after Kepler Cheuvreux's cut to 'hold' from 'buy'.
MILAN STILL IN THE RED, THE SPREAD AT THE LEVELS OF THREE YEARS AGO
Third consecutive session in red for Piazza Affari. The Ftse Mib index -0,5% remained by a hair's breadth above 20 (20.004, to be exact): it was the worst performance among the European markets. The other markets, after an attempt to rebound during the morning, closed with little movement or with parity like Paris. Frankfurt gained 0,1% and London lost 0,2%.
The debt market has always been lively. The Btp/Bund spread closed at 208 bps after rising to 212 in the morning, a new high since mid-February 2014. The 2,29-year rate closed at 2,33% after a peak of XNUMX%.
Just over a week before the first round of the French presidential elections, the France/Germany spread closed at 72 bps, below the peak in the 80 area at the beginning of the week and below the maximum of around 85 bps in February.
RAIN OF OFFERS IN EUROPE BEFORE THE FRENCH VOTE
Investors' attention was focused on the busy auction calendar: Germany placed 2,435 billion euro of 0,21-year Bunds with a yield of 0,41%, a clear decrease compared to 22% on XNUMX March last.
Portugal has issued 1,25 billion euros over 5 and 8 years and up to 2025 with yields of 2,174% (from 2,753%) and 3,303% (from 2,859%) respectively.
Ireland has placed €1,25bn of Gilts in 2023 and 2026, with yields falling to 0,202% and 0,936% respectively, down from 1,046% on 9 March.
THE TREASURE RAISES 10 BILLION. IN MAY THE BTP ITALIA
But the spotlights have remained on above all on the offer of Italian paper. The Treasury has assigned 4,5 billion of the new three-year BTP in June 2020 with a 0,35% coupon, together with the reopening of the 7- and 20-year benchmarks and the March 2030 off-the-run. Yields rose for the 3rd and 20-year yields, respectively at their highest in July 2015 and since April 2016, while the 7-year yield fell.
Btp Italia for 22 billion will expire on Saturday 17 April, but the first issue of 2017 will only be launched in May, after the holidays.
WEAK BANKS. TEN BILLION FOR BANKS AT RISK
According to the provisions of the government, the sum that the executive plans to use for the recapitalization of the banks in crisis amounts to 10 billion euros. These are not new resources but a share, about half, of what was set aside with the saving-saving decree approved at the end of December and converted into law in mid-February.
The news did not prevent the new decline in the credit sector, heavier in Italy than in the rest of the Old Continent, which is also not so bright (European Stoxx in the sector -0,5%, in Italy -1,5%). Unicredit fell by 2,2%, Intesa -0,9%, Banco Bpm -3,1%, Mediobanca -2,6%. A discordant voice in the banking sector was Fineco Bank, up 1,6% to 6,46 euros.
Poste Italiane-1%. The exit of the State from capital seems to be moving away. The government has changed its privatization program. For the 2017-2020 period, the Def calculates collections equal to 0,3% of GDP per year, equal to approximately 5 billion. Down from the 0,5% (8,5 billion) estimated in last year's Economic and Financial Document. The Treasury should transfer its share to Cassa Depositi e Prestiti. It seems that the terms of commercial relations between CDP and Poste will be reviewed.
MPS: MORE CUTS AHEAD, NO DELISTING
In Siena, meanwhile, the ordinary assembly of Monte Paschi was held, while the extraordinary one was skipped due to the absence of a quorum. Therefore, no measure was soon taken on the 2016 loss of 3,2 billion. “The new plan will be radically different from the one in November,” CEO Marco Morelli anticipated. The bank has asked to cover the 8,8 billion shortfall indicated by the ECB with state aid and is therefore negotiating a restructuring plan with the EU that will define the commitments that the bank makes in order to have public money.
The state could eventually cover more than 6 billion of that shortfall and become by far the largest shareholder with around 70% of the capital. The staff cuts will be significantly higher than the 2.600 redundancies already foreseen. There are no hypotheses of delisting of the stock from Piazza Affari, Morelli assured.
PRADA CRUSHES LUXURY: MONCLER -2,3%
Difficult day for luxury under pressure after the announcement of Prada's accounts this morning -1,4% on the Hong Kong Stock Exchange. Net profit fell by 15,9% to 278,3 million, Ebitda fell by 18,6% to 653,4 million. But the net financial position turned positive by 18,4 million from a net financial debt of 114,8 million a year earlier. Prada will distribute a dividend up to €0,12 per share from the €0,11 distributed last year.
Weak Ferragamo (-1,17%) very present like Prada on the Asian markets, which represent its main geographical area, where it achieved 2016% of total revenues in 36, which amounted to 1,438 billion euros (+1 % on 2015). Moncler also falls (-2,3%). Luxottica +1,27%
JUVENTUS (+5%) FLYS BEYOND 500 MILLION
The Juventus star shines: +5,70% after the victory over Barcelona. On the eve of Silvio Berlusconi's departure from Milan, the Juventus club passed the half-billion capitalization threshold, at 503 million. The stock has gained 66% year-to-date. The estimated P/E ratio for 2017 is 10,7.
The automotive companies moved little in Europe, despite Daimler's brilliant results (+0,2%): operating profit doubled to 4 billion euro. Fiat Chrysler drops by 0,2%. On the other hand, Cnh Industrial did well (+1%), which reacts to the latest data on the US agricultural machinery market.
Positive for Piaggio (+1,6%). Roberto Colaninno observed that in the first three months of the year "there was growth in turnover and Ebitda", while debt "is decreasing".
