Direct from the markets | German investor sentiment improves in December, Ftse Mib accelerates higher

German investor sentiment improved in December and European stock markets accelerated to the upside (+0.42% Dax, +0.55% Cac40, +0.23% Ftse100 and +0.91% Ftse Mib at 24,524 points at 11:35). Zew Institute’s economic sentiment index fell from -36.7 in November to -23.3 this month. Economists had predicted a figure of -26.4. The Btp/Bund spread was flat at 188 basis points after the auction, in which the Treasury allocated a maximum of €7bn of Btp from a bid range of €5.5-7bn. In detail, Btp’s third tranche due December 15, 2029, which guarantees a coupon of 3.85%, was issued at 3.5 billion with a yield of 3.61%, the lowest since September against 3.84% in mid-November, according to Reuters. Btp’s fifth tranche for January 2026 was placed at 2 billion at a rate of 3.07% against 3.22% last month. In addition, 1.5 billion of the ninth tranche of Btp, which was not listed on December 15, 2024, was placed on loan. Via XX Settembre has already announced that the short Bot and Btp auctions scheduled for December 28 and the mid-length auctions scheduled for December 29 will not take place.

10:55 European stock markets positive, weak dollar ahead of US inflation

European stock markets continue to rise. Dax gained 0.53%, Cac40 0.25%, Ftse100 0.09% and Ftse Mib 0.26% to 24,368 points at 10:55 a.m. thanks to buying in Banco Bpm, Pirelli, STM, Tenaris and Unicredi . The focus is on US inflation: the figure was released at 2:30 p.m. Wall Street futures are also positive (+0.14% in the Dow Jones and +0.15% in the S&P500). Brent oil rose by 1.23% to $78.95 per barrel, and gold reached $1795 (+0.15%) per ounce. In currencies, the US dollar remains weak (euro/dollar cross 1.0538, +0.12%). “The general view is that US consumer price inflation slowed in November and inflation is expected to fall to 6.1%,” said Ricardo Evangelista, senior analyst at ActivTrades. “This scenario, if confirmed, should not have a major impact on the dollar’s performance. However, last time around inflation was weaker than expected, sending the dollar lower and November marking the dollar’s worst monthly performance since 2010. If today’s data comes in even lower than expectations, there will be room for the dollar to weaken further. Investors may start pricing in a more dovish Fed expectation,” Evangelista concluded.

09:05 Ftse Mib index rises, Banco Bpm rises.

European stock markets rise at the beginning of the session (+0.39% Dax, +0.41% Cac40, +0.12% Ftse100 and +0.33% Ftse Mib to 24,385 points). Wall Street futures (+0.07% in the Dow Jones and +0.08% in the S&P500) were tilted further ahead of November US inflation data, which is important for the Fed. Insiders expect the Fed to raise rates by 50 basis points to a range of 4.25-4.5%, narrowing the scope of money market rate hikes after four consecutive 75-basis point hikes between June and November.

“We think we’ve seen the peak of the Fed and the peak of inflation,” said analysts at Albion Financial Group. “We still have tightenings ahead of us, but most of them are behind us. We are much closer to the end than the beginning.” Also, the dollar remains weak against the euro at 1.05545 (+0.28%) ahead of the December 15 ECB meeting. According to JP Morgan, the Fed’s pause is not enough to weaken the dollar: “The base case still calls for the dollar to strengthen in 2023, but to a lesser degree and in a different composition than in 2022.”

Banco Bpm rose 4% to 3,287 euros on the Milan Stock Exchange as Enasarco completed a reverse IBA transaction to buy up to 1.97% of its ordinary shares. The transaction took place at a fixed price of €3.4 per share, which corresponds to a premium of 8% compared to the closing price of the share. In recent weeks, Milano Finanza has been awaiting interest from the Fund to enter the bank’s capital and participate in a consulting pact (which includes many funds and social security institutions) that currently owns around 8% of Banco Bpm. Enasarco’s possible entry would make the advisory pact about 10% of Banco Bpm’s capital, above its leading shareholder Crédit Agricole (9.2%). Among other banks, Unicredit (+0.79% – €12.80) performed well, concluding agreements to sell €550m of current and future non-performing loans as part of its impairment risk mitigation strategy. Buyers also bought Tenaris (+2% to €15.54) and STM (+1.29% to €36.95). On the other hand, the first meeting between the government and representatives of the main shareholders of Tim (+0.43% – € 0.2105), Vivendi and Cdp, will be held on Thursday 15 to discuss the plans of the new chief executive for the former monopolist. after the offer ends on the network.

08:15 Positive expectations in Europe, US inflation is in focus at the Fed key.

European stock markets at the beginning of the session (+0.33% Eurostoxx50 futures) explosion of macroeconomic data, primarily US inflation in November (previously: +0.4% monthly, +0.4% monthly, +7.7% annual; consensus: monthly +0.3%), important for the Fed (tomorrow, December 14, rate decision: expected +50 basis points). Wall Street futures are positive (+0.10% on the Dow Jones and +0.10% on the S&P500).

Final inflation in Germany is in line with expectations

Germany’s final inflation rate for November has already been published: -0.5% m/m +10% y/y. Data according to the preliminary reading and consensus of economists. At 10:00, it was the turn for the German Zew index for December (previous: -36.7 points; consensus: -26.7 points). 14:55 US weekly Redbook index (previous: +5.7% y/y). “If the data comes in line with expectations, it would confirm that inflation has peaked not only in the US but also in Europe,” said Cfo Sim’s Antonio Tognoli.

Gas price cap at the Energy Board

An extraordinary meeting of the Transport, Telecommunications and Energy Council will also be held today. The consideration of the proposed adjustment of the gas market temporary correction mechanism, the price ceiling, will be particularly important. Compared to the previous weeks’ proposal, it appears that the cap could be set at €220 per MWh (instead of €275 per MWh) with less stringent conditions that would prevent the mechanism from being triggered.

“Frankly, even if 220 seems excessive to us, the conditions that would allow it to start in the first place are not feasible. Among other things, markets are struggling to understand why an agreement on the price of Russian oil was reached quickly and at a price exactly in line with economic expectations ($60 per barrel), while 27 countries still haven’t reached it for gas. an agreement”, stressed Mr. Tognoli.

An important step before the ECB meeting

According to the expert, the extent to which the ECB will raise interest rates after tomorrow, December 15, depends on the outcome of the meeting. “The market expects a 50 basis point increase, but a new gap in energy, which we recall weighs about 50% on inflation, may prompt the ECB to not put its foot down and not risk inflation again. accelerator immediately,” warned Mr. Tognoli.

It would also send a new signal to governments, he added, that the task of monetary policy is not to stimulate economic growth but to maintain price stability. The ECB’s activities aim to support EU economic policies aimed at full employment and economic growth. In other words, everyone must do their part, rowing in the same direction, concluded Mr. Tognoli.

10-year Btp yield rises on auction day

Although the euro rose to 1.05586 (+0.31%) against the dollar, Wti oil rose 1.52% to $74.28 a barrel, and Brent oil rose 1.78% to $79.30/barrel. Gold rose by 0.31% to $1,797 per ounce. The 10-year Btp yield rose to 3.835%, pending announcements from the Fed, ECB and other central banks in the coming days. In addition, the Treasury is committing a maximum of €7 billion over 3- and 7-year re-openings of Btp, as well as a maturity date in December 2024.

Look out for Unicredit, Banco Bpm and Tim in Milan.

On the Milan bourse, look at Unicredit, which has agreed to sell up to €550m of current and future non-performing loans as part of its strategy to reduce non-performing loans, and Banco Bpm as Enasarco launches a reverse IBA operation. to purchase up to 1.97% of ordinary shares at a price of no more than €3.40 per share. On the other hand, the first meeting between the government and representatives of the main shareholders of Tim, Vivendi and Cdp will be held on Thursday 15 to discuss the plans of a new executive for the former monopolist after the offer was suspended. network. ()

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