The stock exchanges are toasting the results of an intense diplomacy weekend this morning.
Chinese stocks fly: the CSI 300 index of Shanghai and Shenzhen gains 3,1%, with Huawei's supplier companies rallying: the truce on trade between China and the United States should include the end of the sanctions imposed on the company producing mobile phones and telecommunications equipment.
The Chinese currency strengthens: cross dollar yuan down by 0,5%, to 6,84 dollars, on the lows of the last two months. Closed for Hong Kong public holidays.
CHINESE DATA WORSE. BEST TOKYO
The resumption of negotiations between Washington and Beijing reduces the sharp drop in the Caixin index, elaborated on the forecasts of the purchasing managers of China's industrial companies: in June, the index dropped to 49,4 from 50,2 in May. Below fifty points, the Caixin anticipates a phase of economic contraction. The Australian economy, closely linked to the Chinese economy, could be paying the price: Sydney's S&P ASX 200 index gains only 0,2% on the eve of tomorrow's meeting of the central bank.
The Tokyo Stock Exchange gained 1,7% after the publication of the Tankan index on the expectations of large manufacturing companies dropped slightly less than expected, to seven from eight. The yen weakened against the dollar to 108,3 from 107,9 on Friday.
South Korea's stock market is at parity, going against the general trend in Asia, also following the bad data on exports. Cold welcome to Donald Trump's surprise visit to Kim.
OPEC, PUTIN AND ARABIA HAVE ALREADY DECIDED
Oil rebounds: Brent just above 66 dollars a barrel after the agreement between Putin and the Saudis.
The gold rush stops: 1.392,86 (-1,2%).
In short, the G20 has not betrayed expectations. In reality, the Osaka summit ended only with a compromise, while the positions on trade and the environment remain distant, as confirmed by the final communiqué. But, the optimists reply, it is already a success that it was possible to sign a common document.
THE STRENGTH ON HUAWEI, TRUMP'S SHOW IN KOREA, RELEASES
China and the United States resume trade talks. Beijing has made large purchases of US cereals, Washington has waived new duties for 325 billion on Chinese imports and reduces restrictions on Huawei. But the litigation on technology and patents remains standing.
The outcome of the summit thus offers a glimmer of moderate optimism: the risk of a sudden tightening is reduced, there is room for a reduction in US rates on July 31, at the Fed meeting, the first cut since 2008.
A few days earlier, on 25 July, it will be up to the ECB to set the parameters of the Tltro loans. After the first half-year gains (+17,35% for the S&P index, a generous 15% for the Eurostoxx and the Ftse Mib), the equity markets still have margins for gains.
Other important news emerged from the summit in Japan.
Vladimir Putin and Saudi Prince Mohammed Bin Salman announced, even before the OPEC meeting, the renewal of the agreement on cuts in oil production for the next six months: -1,2 million barrels per day. Today the agreement will be confirmed in Vienna.
AGREEMENT BETWEEN EUROPE AND MERCOSUR: FIRST PROTESTS
Historic free trade agreement between the European Union and Mercosur (Brazil, Argentina, Uruguay and Paraguay), even if there is no lack of protests from part of the agricultural world. The agreement, reached after twenty years of negotiations, provides for the cut of duties for 4 billion euros a year, protection for typical products, more freedom for services and access to public tenders. 93% of agricultural duties have fallen, but there are already concerns and protests from European farmers "sacrificed" to the interests of finance and industry.
The surprise meeting between Donald Trump and Kim in the gray area between the two Koreas served to defuse the atmosphere along one of the most dangerous borders and to restart the negotiations for nuclear disarmament.
TODAY THE ANTI-INFRINGEMENT RESPONSE. PUTIN FROM FRANCIS
Geopolitics holds court for Europe as well.
A decisive week for relations between Italy and the European Union. Today on the agenda of the Council of Ministers is the adjustment of the state budget for 2019, necessary to give an answer to the EU in the negotiations to avoid the infringement procedure.
Tomorrow the college of EU commissioners will meet in Strasbourg to decide whether or not to recommend the launch of an excessive deficit procedure against Italy.
Vladimir Putin arrives in Rome on Thursday. The Russian president will also go to the Vatican to officially invite Pope Francis to Russia.
In Italy there is also expectation for the meeting at the Mise on Wednesday between Deputy Prime Minister Luigi Di Maio and the trade unions on Alitalia. Di Maio aims to close the dossier "by July 15" and explained that "there are offers that are arriving" and there are not only Atlantia and Lotito as possible buyers. Statements that come after the harsh words about Atlantia: "If we revoke the concessions, we end up putting a rotten company inside".
TIMMERMANS IN THE RUN AFTER JUNKER, DIFFICULT UNDERSTANDING
Crucial days also for the choice of new members of the Brussels summit and Mario Draghi's successor at the ECB: the agreement in Osaka between France, Germany, Spain and the Netherlands on the name of the socialist Frans Timmermans infuriated Matteo Salvini together with the blockade of the 'Eastern Europe. An agreement is sought in extremis.
The duel for the premiership in the United Kingdom continues in London. Jeremy Hunt, running with Boris Johnson for the leadership of the Tories, has said he supports the hypothesis of a no-deal Brexit but, unlike his challenger, does not intend to set a date for the UK to leave the EU.
With the political elections in Greece, the government season of Alexis Tsipras could come to an end.
PMI INDEXES IN EUROPE, US LABOR MARKET
Among the macroeconomic data expected this week are the PMI manufacturing and services indices in June for Italy, France, Germany, the Eurozone and Great Britain.
The data on the labor market in May should also be followed.
Car registration data for Italy in June will be announced tonight
WALL STREET STOPS FOR A DAY AND A HALF
Short week for the US stock exchanges, closed from 12 noon on 3 July and for the whole of 4 July for Independence Day. But the eighth will be full of sensitive data, among which the numbers on the labor market stand out: 158 new jobs are expected, the jobless rate should remain unchanged at 3,6%, the highest for 50 years.
The data on construction spending in May and the ISM manufacturing index in June should also be followed.
