All or almost according to forecasts. The Fed announced yesterday evening the start of the "historic" reduction of portfolio assets, the result of the enormous injection of liquidity in recent years. It will be a very gradual operation: starting from 10 billion dollars a month and going up to 30 billion. The goal is to bring down the budget, thanks to the non-reinvestment of interest, by at least one thousand billion (against the current deficit of 4,200 billion) over the next few years.
ANOTHER RATE RISE IN 2017
The only relative surprise regards interest rates: the Central Bank deems a further rise of a quarter of a point during 2017 “appropriate”, the statement reads. Also in 2018, this is the opinion of the board (which will be largely renewed by Donald Trump in the coming months), it will take three increases. Then, in 2019 two will be enough; only one in 2020.
The hurricanes that scourged Texas and other regions of the States have therefore not changed the estimates on the economy: in 2017 growth will be 2,4% (well below Trump's objectives), to then settle at 2,1. 2 next year (at 2019% in 4,3). On the other hand, unemployment, already at its lowest, will drop from the current 4,1 to XNUMX%.
BUT INFLATION IS DOWN. YELLEN: IT'S A MYSTERY
Inflation is down: the estimate on consumer prices net of volatile (core) components for the current year has been lowered to +1,5% from +1,7%. The one for 2018 has also been cut. During the press conference Janet Yellen said that "the failure to rise in inflation remains a mystery" on which the Central Bank continues to question itself.
The decisions of the Fed, slightly more "hawkish" than expected, caused the recovery of the dollar against the euro, which fell to 1,1879 (from 1,20), a drop which, if confirmed, could prompt the ECB to anticipate the reduction of Qe.
Wall Street, after an initial decline, resumed its record-breaking path: S&P 500 (+0,06%) and Dow Jones (+0,19%) closed on new all-time highs thanks to the boost from the financial sector. The Nasdaq slows down (-0,08%), held back by the decline of Apple (-1,7%). Apple has had to admit that there are connection problems with the latest iWatch. Meanwhile, orders for the iPhone 8 are much lower than those for the previous version.
Yields on T-bonds are increasing: the two-year bond rose to 1,451%, the highest since November 2008, the ten-year bond to 2,278%. Gold slips just below the $1.300 an ounce level.
JAPAN LEAVES RATES UNCHANGED
The meeting of the Central Bank of Japan has also recently concluded: rates, as expected, remain unchanged like the purchases foreseen by Qe. The yen/dollar cross drops to 112,95, to its lowest level in two months. Instead, the Tokyo Stock Exchange rose by half a point.
China's stock markets are up: Hong Kong +0,1% and the CSI 300 index of the Shanghai and Shenzen stock exchanges +0,2%. Seoul -0,1%, Mumbai +0,1%.
OIL RECOVERY THANKS TO BAGHDAD
The rise in oil continues after the declarations of the Iraqi Energy Minister, according to which Baghdad could decide to spontaneously reduce its production to support the price. Brent rose by 1,9%, to 56,24 dollars a barrel, the highest since April; Wti at 50,41 dollars (+1,7%).
At Piazza Affari Eni +1%. Banca Imi reduced the target price from 18,1 to 17,6 euros (a level which is still higher than the current stock market prices), confirming the buy recommendation. Saipem also made progress (+1,3%).
SPAIN SCARES EVEN BTPs
Expectations yesterday for the European Stock Exchanges. In Milan, the Ftse-Mib index dropped 0,31%, stopping at 22.355 points. The other continental price lists were lukewarm: Paris +0,08%; Frankfurt +0,06%; London -0,05%. Out of the pack Madrid, which loses almost 1%, unnerved by the problems in Catalonia.
Spanish police have arrested Catalonia's deputy economy minister in the first raid of government offices in the region ahead of an unauthorized referendum on independence.
OECD REVISES GDP ESTIMATIONS
The Italian economy will grow at a rate of 1,4% this year and 1,2% next, according to the Organization for Co-operation and Development (OECD), which in June alone projected a GDP expansion of 1,0, 2017% in 0,8 and 2018% in XNUMX.
The OECD has revised upwards its estimates for the entire euro area, which will grow by 2,1% this year and by 1,9% in 2018, while the June estimates indicated an expansion of 1,8% for both 2017 and next year.
Growth forecasts for both the current and next year of France (+1,7% and +1,6% from +1,3% and +1,5% in June) and Germany have also improved, whose GDP is expected to grow by 2,2% this year and 2,1% next, while the June forecasts envisage growth of 2,0% in both years.
SPREAD AT 169 BP. MADRID AUCTION TODAY
The spread with the Bund widened (+1,93%, to 169.30) points after a well-tuned first part of the session. Peripherals suffered ahead of today's Spanish auctions and in the wake of news from Spain itself.
Today Madrid is offering between 4 and 5 billion Bonos 2021, 2026, 2028, 2044. Paris is offering between 6 and 7 billion Oats 2020, 2023, 2024 and indexed 2021, 2030. Ireland is also up for auction on the sector very soon. Yesterday, however, the German auctions were held, with the placement of 1,6 billion of the new 1,75th anniversary of Portugal, in its first issue after the S&P upgrade, with XNUMX billion of very short-term bonds.
DON'T LIKE MUSTIER'S (ALLEGED) GERMAN PLAN
Banks down (European Stoxx -0,7%): Intesa -0,3%, Banco Bpm -0,4%. To shake the waters of Piazza Affari, already destined for a quiet day, Unicredit thought about it. The institute, according to Reuters, recently expressed interest to the German government in a merger with Commerzbank, according to two sources familiar with the situation, according to which an agreement with the state-owned bank would in any case only come in the medium term. "No comment" from all concerned.
The market reaction was not long in coming: UniCredit closed down by 2,24%, at 17,47 euro, with strong volumes (one and a half times the average of the last month). Commerz's reaction was of the opposite sign: the share in Frankfurt closed up by 2,41%, at 10,835 euros (double trades compared to the average).
Mediobanca was up (+0,7%) after the advances on the Piazzetta Cuccia plan to transfer the 13% share of Generali in parity in a holding company open to third party investors.
ATLANTIA BRAKS: ABERTIS FARTHER
A torpedo also arrives from Germany against Atlantia (-1,7%) after the German newspaper Boersen Zeitung wrote that the Spanish group Acs would intend to relaunch on Abertis, already in the sights of Atlantia, through the German subsidiary Hochtief. To finance the operation, the newspaper always states, a major capital increase is planned for Hochtief, in addition to the opening of a debt of 10 billion euros.
CONCRETE, BUZZI TAKES FLIGHT. NEW RECORDS FOR FCA
In the spotlight the cement manufacturers. Among the blue chips, the leap by Buzzi stands out (+6%), the second largest Italian cement group, which indirectly benefits from the news that Cementir has sold its Italian assets in cement production to the German Heidelberg for 315 million euros. Yesterday morning, Kepler Cheuvreux analysts raised the target price of the stock to 27 euros from 25, confirming the Buy judgment. Cementir rose by 6,1%.
Fiat Chrysler rises by 0,9% and sets a new record. Stm -1,7%. The luxury stocks contrasted: Luxottica -0,4%, Moncler +0,9%, Ferragamo -0,8%, Yoox -0,2%.
FIRST PROFIT FOR TISCALI, CENTRALE DEL LATTE FLIES
Centrale del Latte d'Italia +16%, on the maximum for the year. The company has released an update on revenue as of August 31, 2017. The company's net revenues increased 90 percent over the same period a year ago. The data confirm the positive trend recorded in the first half.
Tiscali (+1,49%) closed the half-year with a profit of 24,5 million. This is the first time since the company was founded that it has recorded a positive net result.
Fiera Milano +5%, Dada +4%, La Doria +3%, Maire Tecnimont +2,1%, First on Motors +1,8%.
