Direct from the markets | Ftse Mib consolidates above 25,000, spread moves to 205
European stock markets are positive at the beginning of the session (+0.44% Dax, +0.11% Cac40, +0.19% Ftse100 and +0.14% 25,215 points Ftse Mib). Wall Street futures were weaker (-0.02% in the Dow Jones and +0.05% in the S&P500).
Disappointing industrial production in Germany
On the macro side, industrial production in Germany increased by 0.2% on a monthly basis in November. On an annual basis, this number decreased by 0.4%. The economic reading slightly disappointed the consensus of economists who predicted +0.3% m/m. The euro strengthened against the dollar and reached 1.06932 (+0.58%). Also oil (+2.39% at $75.53/bbl for Wti, +2.11% for Brent at $80.23/bbl) and gold (+0.53% at $1,879/oz) purchases were also made.
10-year Btp yield falls to 4.27% with risk of tightening public accounts
In the bond sector, the 10-year US Treasury yield fell to 3.56%, while the 10-year Btp yield rose to 4.27%, with the Btp/Bund spread reaching 205 basis points. For several days, Italy has been surrounded by controversy over the ECB’s monetary policy choices, which put the country’s public accounts at risk. An alarm was sounded by the Financial Times, which reported the result of a survey of economists: 9 out of 10 identified Italy as the component of the euro zone most threatened by the liquidation in the government bond market”, emphasized Fabrizio Barini. Connect the wires. After all, despite economic recovery in 2021 and 2022, public debt remains among the highest in the world at over 145% of GDP. Last August, the Financial Times reported on hedge funds’ speculative maneuvers against Italy. of the ECB. Giorgia Meloni was more lenient, saying that rising rates risked the credit impact on families and businesses. But is it legitimate for those with an institutional role to criticize the work of the central bank? It was Eurotower itself that threw water on the fire, confirming in a recently published study that the cost of debt could remain “sustainable” despite the increase.
The acquisitions at Mps, Bper and Ferrari are promoted by Citi
Milan-listed Mps rose 1.97% to 2,025 euros as CEO Luigi Lovaglio sees room for more banking centers in Italy. A consolidation that will definitely attract the Sienese bank. Among other banks, Bper Banca (+1.39% – 2.11 euros) and Unicredit (+0.99% – 14.85 euros) also rose. The Ferrari company (+1.48% – 212 euros) was also highlighted, which raised the Citi sales rating to a neutral level. On the other hand, as for Tim (+0.13% to 0.2359 euros), the infrastructure fund Macquarie, Cassa Depositi e Prestiti in Open Fiber partner, is a supporter of the government’s project to create a national network tlc. Gianluca Ricci, head of Macquarie Asset Management Italy, said in an interview with Milano Finanza on Saturday that it is working with interested parties on the project. Also according to Milano Finanza, Irene (+0.31% – €1.59) aims to sell a minority stake in the gas distribution company, which could have an enterprise value of around €700-800 million. Similarly, Edison (+0.35% – €1,415 rnc), a subsidiary of EDF, may decide to sell its gas storage activities and Snam (-0.61% – €4.74) may consider selling its stake in gas storage operator Stogit can Finally, we note that the Brunello Cucinelli board of directors (+ 1.71% – 71.25 euros) is meeting to analyze the preliminary balance figures (income).
7:50 Europe US inflation set to rise in week
European stock markets positive expectations In early trade, the Eurostoxx50 rose 0.67% ahead of the release of key macro data. At 8:00 a.m. Germany’s monthly output in November (estimated at +0.1% vs. -0.1% in October) and at 11:00 a.m. Europe’s November unemployment rate, which should remain steady at 6.5%. Wall Street futures also rose (+0.19% in the Dow Jones and +0.28% in the S&P500). 10-year US Treasury yield It fell to 3.56%, whereas the 10-year Btp rose to 4.22%.
Key Macroeconomic Data in Key Fed Countries
Key data from the Fed on Thursday, January 12 at 2:30 p.m.: weekly US jobless claims (estimated at 220k vs. 204k last week). Also at 2:30 p.mUS inflation in December (estimated at 6.5 percent vs. 7.1 percent in November). “The known and estimated data, if confirmed, would indicate that the Fed could tentatively move closer to achieving its three most important goals. A 375 basis point increase in interest rates since January has pushed inflation lower, although Fed Chairman Jerome Powell recently reminded us that inflation remains high. unemployment is around the natural ratevirtually all Americans are employed and GDP grew 3.2% in the third quarter, partly due to a +2.3% increase in personal consumption. A slowdown is expected in the fourth quarter,” said Antonio Tognoli of Cfo Sim.
The data, according to Mr. Tognoli, suggest that on balance the economy could continue to grow by at least 100/150 basis points (first likely 50 basis points at the next meeting on January 25/36). with a soft recession and an unemployment rate of 4%. This is likely to accelerate the achievement of the 2% inflation target.
The dollar is expected to weaken
The implications for 2023 anyway suggest a “weakening of the dollar that could return to 0.9 against the euro.” A weak dollar usually means emerging market currencies tend to appreciate, the Cfo sim explains, although lately the dollar appears to have weakened mainly at the expense of other strong currencies, such as the euro (at 1.067, +0.45%) ), the yen (exchange rate of 131.853, -0.06%) and the Swiss franc. A weaker dollar is also favorable for oil prices (Brent +1.36% to USD 79.64/bbl and Wti +1.45% to USD 74.84/bbl) tends to be inversely related to the dollar price. “However, at this stage, it is necessary to assess how a long or very long recession in Europe and the United States may affect the price of a barrel, and also how the political situation in Iran may develop,” warned Mr. Tognoli.
Watch out for Mps, Tim, Brunello Cucinelli and utilities in Milan.
On the Milan list, Mps among the banks, because there is room for more banking poles in Italy for CEO Luigi Lovaglio. A consolidation that will definitely attract the Sienese bank. On the other hand, as far as Tim is concerned, the Macquarie infrastructure fund, Cassa Depositi e Prestiti in Open Fiber partner, supports the government’s plan to create a national tlc network and is working with stakeholders on the project. , Gianluca Ricci, head of Macquarie Asset Management Italy, said in an interview with Milano Finanza on Saturday. Also according to Milano Finanza, Irene wants to sell a minority stake in the gas distribution company, which could have an enterprise value of 700-800 million euros. Similarly, Edf’s subsidiary Edison may decide to sell its gas storage business, and Snam may consider selling its stake in Stogit, which operates the gas storage facility. Finally, it should be noted that the Board of Directors of Brunello Cucinelli is meeting to analyze the preliminary balance sheet data (revenues). ()
