The dollar rises, the stock exchanges in Asia and Europe are thankful. For the eighth day in a row, awaiting news on the tariff front, the markets are directing purchases towards the US currency, destined to also benefit from the agreement on the federal budget reached overnight in Washington.
However, the agreement does not mention the Wall with Mexico and Donald Trump, who opened the long race for re-election yesterday in El Paso, promises surprise blows. However, nothing that could undermine the equilibrium, albeit unstable, of the markets: the Eurozone is struggling, China is holding back while the US economy seems able to continue its run. And so, despite the fact that there is no more talk of raising interest rates, the dollar strengthens its positions on both the yen and the euro, which slipped overnight to 1,1267, to its lowest level in two and a half months.
Meanwhile, today, new twists on the Brexit front are announced.
Little or nothing new, however, for Italian finance. Speaking in Brussels with Italian public accounts journalists, Slovakian Finance Minister Peter Kazimir yesterday expressed himself as follows: "I'm a Catholic and I believe in miracles, so I'm serene even when it comes to Italy's chances of achieving its goals of deficit reduction".
NIKKEI ADVANCED 2,4%, WALL STREET FLAT
Almost all Asian stock markets rose, starting with Japan's, closed yesterday for holidays: the Nikkei recorded a 2,4% increase in response to the weakening of the yen.
Two days after the resumption of trade negotiations between China and the United States, the CSI 300 index of the Shanghai and Shenzhen stock exchanges gains 0,8%. Hong Kong +0,3%, Taipei +0,8%, Seoul +0,5%.
The only currency that appreciates against the US currency is the Indian rupee.
Little move yesterday Wall Street: Dow Jones -0,21%, S&P 500 +0,07%, Nasdaq +0,13%.
The market is optimistic about Beijing's tariff talks. At least a postponement of the expiry of the US ultimatum, today set for March XNUMX, is expected.
Apple drops 0,6%: according to IDC iPhone shipments in China have decreased by 20%.
Brent oil trades at 61,3 dollars a barrel, up 0,8%, yesterday however it closed down 1%.
EUROPEAN EXAMS REWARD BANKS
The dollar rises, the yield of the Bund rises. And, after a very difficult week, the pressure on Italian finance is easing thanks to credit performance. The great fear of a new squeeze on the banks on the occasion of the new Srep requirements, which had also sparked panic in December, in fact proved to be unjustified. The institutes of the Bel Paese, for once, passed the test with flying colors, helping to propel Piazza Affari to the top of the list despite the increasingly thick clouds over the economic and political horizon of the Bel Paese which arouse concern, but also irony.
Milan (+1,21% at 19.586 points) was the best stock exchange. Frankfurt (+0,99%), Paris (+1,06%) and Madrid (+0,99%) performed well.
London +0,84%. On the macro front, the UK's gross domestic product grew on a quarterly basis by just 0,2% in the fourth quarter of 2018. Investment fell by 3,7%, to its lowest level since 2010. British Prime Minister Theresa May, who today rejected Labour's proposal for a soft Brexit deal, will speak in the House of Commons today.
Italy must make responsible budget choices considering the current economic slowdown, said the vice president of the EU Commission Valdis Dombrovskis, according to whom the first version of the maneuver, later corrected by the Lega-M5s government under pressure from Brussels, has already done damage.
The EU commissioner, speaking of the pressure on the Bank of Italy, underlined the importance of "preserving the independence of the central bank and of the supervisory financial institutions".
JP MORGAN SEEING GDP DOWN 0,3% IN 2019
The macroeconomic data released in recent weeks have prompted JP Morgan to revise its estimates for Italy downwards. The new forecast for GDP for the current year places the bank at the top of the pessimistic rankings: -0,3% in 2019. In the first quarter, the contraction should be 0,3%. The GDP/public debt ratio is set to rise this year to 133,5%, from 132%.
The Btp secondary closed in positive ground, confirming the recovery already highlighted in the morning after last week's bad performance, when yields jumped to a record since mid-December.
It was mainly the hedging after the heavy sales of the last few sessions that allowed a rise in prices that brings the spread between Italy and Germany back below 280 basis points after Friday's flare up to 295.
Progress also on the other maturities: the two-year yield falls by 6 basis points (0,57%), the thirty-year yield falls by 10 basis points (23,73%).
The vision improves compared to the other peripheral bonds: the Italy/Spain spread is reduced by 12 basis points from 177 to 165.
MARKETS ALREADY LOOK AT FITCH'S RATING
In this context, today's auction of the 12-month Bot is eagerly awaited. On the gray market at the end of the session, the bond, offered today for 6,5 billion euros, was trading at a yield of around 0,28%, in line with the allotment rate of the mid-January auction.
“Looking at the polls for Matteo Salvini, the possibility of becoming prime minister is approaching” observes Christoph Rieger, interest rate strategist for Commerzbank interviewed by Reuters. “This – he adds – does not eliminate the climate of uncertainty but the markets could appreciate it”.
Of great importance is the appointment of 22 February, Friday next week, when in the evening Fitch pronounces itself on the Italian sovereign rating, currently equal to 'BBB' but with a negative outlook.
BANCO BPM GOES INTO ORBIT, BPER AWARDED
The banks have come to light. The banking index, solid at European level (+1,24%) recorded a real exploit in Italy (+1,81%), thanks to some positive data, starting with the results of the Srep. In the last few hours, the Supervision of the ECB has communicated the minimum thresholds of the Common Equity Tier 1, in most cases, the indications are in line with those arrived a year ago.
In addition, there is the reassuring press release from the Bank of Italy on the trend of non-performing loans, in December the gross figure was equal to 100,2 billion euro, the lowest since July 2011. The month before, non-performing loans were 117 Net NPLs fell below the 30 billion euro mark, 29,5 billion.
Banco Bpm stands out (+7,03%), the only bank in Italy to have received a reduction in the company specific requirement given that "in all other cases the ECB has asked for an increase or confirmed the 2018 levels", underlines Equita Sim, specifying that the result for the year was affected by the derisking acceleration process.
Bper Banca is also running (+4,14%) Kepler Cheuvreux has raised the target price to 4,5 euros from 4, while Equita Sim has moved the target price to 5,5 euros from 5,4. Both confirm the buy judgment. Conversely, Société Générale reduced the target price to 3,4 euros from 4,7, leaving the rating on hold.
Ubi+2,96%. Unicredit (+1,8%) and Intesa Sanpaolo (+1,23%) were also well received, however crippled by a cut in the target price by JP Morgan: the broker cites the risk of a further burden for both institutions of the ECB rules relating to the management of NPLs, as well as the impact of an interest rate which could turn out to be lower than expected.
Best stock on the Banca Ifis list, specialized in non-performing loans and NPLs, which jumped by around 18% in the wake of the 2018 preliminary results.
Azimut flies (+3,98%) in the managed sector. In an interview, the chairman Pietro Giuliani attributed the bearish bets on the stock to possible interest in buying the company.
MINUS SIGN ONLY FOR FCA, CNH ADVANCES
The only blue chip in negative territory is Fiat Chrysler (-0,1%), still suffering after the -14% following the balance sheet. CFO Richard Palmer met with analysts.
Instead, Cnh Industrial is making progress (+2%). Pirelli was also positive (+1,7%).
Time +2%. The Brandes fund increases its stake to 2,4%, from the previous 0,1%. The same entity holds 6,61% of savings shares.
Leonard +1,5%. The subsidiary Agusta Westland is betting on a 900 million dollar order from the United States Navy.
JUVENTUS (+3%) COMPLETES THE PURCHASE OF RAMSEY
Good Juventus (+3%). The company has finalized the sports performance contract with the footballer Aaron James Ramsey with effect from 1 July 2019 and expiring on 30 June 2023. Against the player's registration, Juventus will bear ancillary charges of 3,7 million, payable by 10 July.
As Roma was also positive (+3,4%) at eve of the Champions League match against Porto.
Outside the main index, D'Amico sinks, leaving 20,7% on the ground after announcing a capital increase of up to 60 million dollars on Friday after the markets are closed. Equita Sim lowered the target price to 0,16 euro from 0,18, with hold rating.
