Oil down, bond yields skyrocketing. Not surprisingly, markets are preparing to hike for the Fed's decisions on the next rate hike. It is more difficult to interpret the decline in crude oil: it may be the reaction to China's new difficulties, grappling with the return of Covid-19. Or a clearing signal in the various negotiations to stop the Ukrainian tragedy. But it is not easy to decipher the developments of the situation, starting from the outcome of the confrontation in Rome between the US national security adviser, Jacob Sullivan, and the head of diplomacy of the Chinese Communist Party, Yang Jiechi. He weighed on the match the scoop from the Financial Times according to which Washington assumes that Beijing is ready to help Moscow by sending arms: the news has been vehemently denied by China. But the fact that the meeting lasted seven hours and promises to have a follow-up favors an optimistic reading: Beijing is preparing the ground for entering the field with a leading negotiating role on Ukraine. Washington, for its part, collects the Europeans' substantial adhesion to his line.
Hong Kong down 3%. CSI 300 -2,4%
In Asia Pacific it rises almost only the Tokyo Nikkei (+0,7%). It is assumed that the Bank of Japan, which will meet on Friday, will not follow the tightening of the Fed and the Bank of England, with evident effects on the currency: the dollar-yen cross is at its highest since 2016, at 118,3.
Chinese macroeconomic data released tonight beat expectations and caused a momentary recovery in the stock market, but in the final session the CSI 300 index of the price lists shows a drop of 2,4%. Hang Seng of Hong Kong -3,1%. The technology index shows no signs of reacting after Monday's losses, the most massive since 2008.
The market is looking at the latest data on the infection: 5.200 new cases yesterday, a new record. In February, despite the lockdowns, industrial production rose by 7,5%. The Kospi of Seoul loses 0,6%. S&P ASX200's Sidney -0,7%. Mumbai, on parity, while the Indian rupee appreciates against the dollar.
Wall Street futures up. Apple -2,7%
Wall Street futures are up about half a percentage point this morning. Yesterday the market rate hike knocked out the techs Nasdaq (-2%). On equality the Dow Jones, despite the declines in the energy sector.
Among the worst titles Apple (-2,7%): the Foxconn factories in Shenzhen where the iPhone is produced are closed due to the pandemic.
Note the coup by Senator Joe Manchin, the decisive Democrat for Biden's majority in Congress. Manchin, backed by the coal lobby, said he would not vote in favor of appointing Sarah Bloom Raskin to the Fed, who is expected to lead the central bank's environmental task force.
The 2,15-year US at 100%, oil below XNUMX dollars
Expectations of monetary tightening are also pushing down bonds: The 2,15-year Treasury Note is at a two-and-a-half-year high at 25%, ten basis points higher than yesterday. Bank of America expects a first increase of 2023 basis points tomorrow, with the presentation of the Federal Reserve's balance sheet reduction plan: four more increases in the cost of money will arrive during the year, four in 2024 and one in XNUMX.
Il Petroleum WTI is down nearly 5% again this morning to $97 a barrel after yesterday's 5,8% drop. Texas crude has lost a fifth of its value in the space of a week. The increase in the yield on bonds penalizes their, down 1% to $1.932. Euro in appreciation to 1,098.
Gentiloni: EU GDP growth of 4% is "unrealistic"
The damages are and will be significant, but it is "a bit early" to have serious estimates. Certainly, says the EU Commissioner for the Economy, Paolo Gentiloni, The forecast of 4% GDP growth in the European Union is "no longer realistic" advanced before the aggression on Ukraine. But the combination of the various effects, from the crisis of business and consumer confidence to the duration of the emergency, advises "postponing an assessment based on a little more certainty until mid-May". This explains both the caution adopted by the ECB and the silences of Brussels on the adoption of any Eurobonds for specific programs on defense and energy yet to be specified. For now, while waiting for the Fed to take the field, European pressure on sanctions counts, which has reached the fourth package.
Russia at risk of default: the first stage tomorrow
Before moving, it is advisable to know Putin's countermeasures. On Wednesday, when two installments of Russian bonds (117 million in all) mature, it will be seen whether Moscow intends to put into practice the threat to repay the debt in rubles instead of dollars, as the Finance Minister threatened in response to the blockade of a large part of the Moscow reserves.
Btp: the spread goes down, the yield goes up
Under the weight of this threat and the prospect, also on Wednesday, of the first US rate hike since 2018, the BTPs are losing blows. The yield differential between the BTP and the Bund on the 10-year segment stands at 158 basis points, while the 1,96-year rate is worth 22%, the highest since 1,89 February, from XNUMX%.
In addition to Kiev's talks with Moscow, the market is pricing central bank decisions in advance: Wednesday evening's Fed meeting, Thursday's BOE meeting and Friday's Bank of Japan decisions. In a sharp rise in eurozone rates, in addition to the 0,38-year Bund yield climbing to 16%, its highest since February 1, the 2019-year Irish yield moved beyond the XNUMX% threshold for the first time since January XNUMX.
Milan runs, Frankfurt more
Business Square, driven by general optimism, closed the first weekly session with an increase of 1,67%, reaching 23.426 points. Best of all Frankfurt, which closes the session with a +2,3%. Running too Paris (+ 1,9%) and Madrid (+1,2%), while outside the EU London, where the oligarchs' treasury hunt is intensifying, gained 0,6%.
On the shields the auto sector, which gains 4,7%. Volkswagen +6,7%: electric makes more money. The banking sector is gaining (+2,8%), luxury is down after the embargo on sales in Moscow.
Tim, KKR likes the green disc
Leader of the rise in Milan was Team (+4,9%), after a long Sunday board meeting in which it was unanimously resolved to mandate the chairman and the managing director to start an interlocution with Kkr, formal and additional to those already undertaken informally in recent months by the consultants. According to Banca Akros, "the probabilities (recently rather low) that the offer will eventually be finalized are increasing".
Banks and cars to the rescue
Banks, heavily hit by last week's declines, lengthened. Among the big, very tonic Intesa Sanpaolo (+ 3,7%) and Unicredit (+3,3%). Even better Mediobanca e Bper Bank, both +4,1%.
Also runs the car with Iveco (+ 4,27%) and stellantis (+3,73%). Then shop on Interpump (+4,4%) and in the healthcare securities sector: Diasorin + 3,6% Recordati +2,9% and Amplifon + 2%.
A break for Leonardo and the energetics
Last week's most popular titles lose out, starting with Leonardo (-1,6%), victim of realizations after the recent run due to the 2021 results and the geopolitical context leading to an increase in military spending. Intesa Sanpaolo analysts confirmed the "Add" recommendation with a new target price of 10,7 euros from 8,2 euros.
The decline in oil puts the brakes on energy stocks. Tenaris closes the list with a loss of 2,5%, followed by Saipem (-0,8%) ed Eni (-0,4%). Closes in red Saras (-1,82%).
The appeal on utilities is also missing: A2a leaves 1,11% on the ground, Snam -1,03%.
Mfe goes up in Germany: merger with Mediaset Espana in sight
To report Mfe (+ 1,39%) and Mfeb (+4,54%) the two former Mediaset stocks. Today the board of directors of the company will approve the delisting of Mediaset Espana, suspended from trading on the Madrid Stock Exchange. Intesa Sanpaolo analysts write that “a scenario of this type would bring back the project of a merger between the Italian and Spanish businesses, abandoned in June 2020 due to the opposition of Vivendi. Based on the latest closing of Mediaset Espana (5 euro), the free float is worth 694 million. We do not exclude that, in the event of an offer, Mfe may incentivize the conversion of shares with a special dividend and/or a buyback”.
Meanwhile, the former Mediaset has risen to 25% in ProsiebenSat, the German company that continues to refuse the invitation to join the European network of the Biscione.
Champions League closest, Juventus +5,4%
Strong there Juventus (+5,4%) after consolidating the position in the race for the Champions League.
