MILANO – An unexpected scenario, given that the president Mattarella he had clearly indicated his unwillingness to be elected, but in the end the crystallization of the tandem with Draghi at the helm of the country is the best the financial markets could ask for. This is the climate between the foreign financial press and investment banks.
The “status quo” can lower the spread
“Mattarella’s election is positive for the financial markets, as it allows Draghi to remain prime minister for another year unless – unlikely – political crises”, he summarizes. Luca Tobagi, investment strategist of Invesco, an independent investment giant with over $ 1.6 trillion under management, interests in twenty countries and an office in Milan. BTP subscribers “will be reassured by the fact that Draghi can carry out the reform plan and the Next Generation Eu program and try to improve the country’s productivity”. Reason why the spread “can tighten. And the stock market can also benefit”, especially the financial sector. A surprise therefore, but not too much, which should not have major repercussions on the markets that had not incorporated a possible crisis in the latest trends but had on the other hand begun to harbor hope that Draghi remained in place.
As a note Bloomberg, the disconnect with which the major parties re-emerge following the six days of failed attempts to find an alternative to Mattarella’s reconfirmation could give a boost to the agenda of the former European governor in the final part of his mandate. If, therefore, the outcome of maximum stability for the markets is the best possible, the question is whether Palazzo Chigi will be able to hold together the pieces of the majority to continue working on Recovery plan and on the upcoming deadlines for the next few months. Considering that the majority brought their votes to Mattarella compact, Tobagi reasoned, “the new basic scenario is that the government goes on until 2023”. Also for the Wall Street Journal stability is the result that the markets bring home, at least until the formation of the new government is under discussion – in a year’s time. Online summary of Financial Times, according to which re-election is favorable for the Italian business community and international markets, worried that the election would open up a political crisis that would interrupt the path of reform necessary for the country. And we must not forget, Tobagi points out, that at this point it will be Draghi who will manage the revision of the Stability pact which imposes itself on the European agenda, and its presence could be a guarantee of a favorable outcome for Italy.
Erik F. Nielsen, chief economist advisor of Unicredit, mentions in his Sunday note Isabelle Mateos and Lago di BlackRock and his tweet commenting on Saturday’s result: “Why change a winning team?”. Before the election, analysts of Barclays they had hypothesized three different scenarios from the vote: citing Sergio Leone, a “good”, an “ugly” and a “bad”. And what finally emerged from the big electors is undoubtedly the “good”. Unexpected, because at that time Mattarella’s unavailability for re-election was acknowledged, but more benign for the financial markets: the choice of the president with a large majority of votes and the confirmation of Draghi in his place. The “status quo”, according to the British bank, constitutes a good basis for achieving the objectives of the PNRR in 2022, even if it deprives investors of the prospect of having the former president of the ECB in a leading role in Italian politics for a longer period. The outlook is that Draghi’s work will become increasingly difficult as the 2023 elections approach, but overall, possible shocks are absorbed in the markets and the spread is seen in the 120-150 basis points area.
Italy, now the proof of the GDP. Eyes on the ECB
Once the Quirinale has passed, the markets are now concentrating on the agenda of the next appointments. Italy protagonist already on Monday with the diffusion of GDP estimates of the fourth quarter. Minister Brunetta has predicted a + 0.6% that would bring the final balance of 2021 to + 6.5%, which should be followed – assures the holder of the Public Administration – another figure higher than + 4%.
the quarterly (Amazon and Alphabet above all) could offer an opportunity to recover after the difficulties of the first days of the month, but four data are expected above all: European inflation in January, scheduled for Wednesday 2 February, the meeting of the ECB next Thursday (which will be joined by that of the Boe) and the following day the data on US employment in January. Christine Lagarde there is no big news expected, even if after the announced Fed squeeze curiosity grows to understand how the Eurotower will react. If a squeeze on interest rates by the ECB is therefore not coming soon, the speech is different in the United Kingdom where, again on Thursday, an intervention by the Bank of England is expected: forecasts indicate a rise of 25 basis points for bring rates to 0.5%. Also noteworthy is the opening of the Winter Olympics in China, starting from Thursday 4 February, which will be attended by President Xi Jinping, who requested a “simple, safe and splendid” organization. At the inauguration in Beijing, Xi will meet with Russian President Vladimir Putin and is expected to mediate in trying to extinguish tensions between Moscow and Washington over Ukraine.
Here is the breaking latest news agenda of the main events of the week:
MONDAY 31 JANUARY
– Japan: consumer confidence
– Istat: GDP estimate for Italy in the fourth quarter
– Istat: online press conference on GDP – Eurozone: fourth quarter GDP
– Germany: preliminary inflation January – Inflation: – Formiche “Inflation, the great threat” with Laura Castelli, Deputy Minister of Economy and Finance; Pier Padoan, president of Unicredit; Luigi Marattin, president of the Finance Committee of the Chamber; Moreno Zani, President of Tendercapital.
– Expo Dubai: Italian Pavilion, Health Innovation Global Forum 2022 event, organized by the Alisei National Life Sciences Cluster, with Carlo Bonomi, President of Confindustria (video message) (2.45 pm)
– Bankitalia: “Sector financial accounts” “Monthly tables of Banks and financial institutions: loans and deposits by sectors and territories” “General government operations” “Other financial institutions”.
TUESDAY 1 FEBRUARY
– Istat: December unemployment rate
– Germany: December retail sales – Germany: January unemployment rate – France: preliminary January inflation – France: January manufacturing PMI
– Spain: manufacturing SMEs in January
– Eurozone: December unemployment rate – Cars: registrations in December
– Mef: requirement in December
– USA: Markit and Ism manufacturing in January – USA: construction spending in December
– ECB: survey on bank lending in the Eurozone – Bankitalia: “Survey on bank lending: results for Italy”
– Trimestrali Usa: Exxon Mobil, General Motors.
WEDNESDAY 2 FEBRUARY
– Istat: basket of consumer prices. Year 2022 – Istat: preliminary inflation in January – Eurozone: inflation rate in January
– Istat: Press conference on online inflation – USA: employed in the private sector ADP in January – USA: weekly crude oil stocks
– Opec+: meeting
– Quarterly USA: Alphabet
THURSDAY FEBRUARY 3
– Composite manufacturing SMEs index and services Italy, France Spain, EU, Germany UK USA January
– ECB: decision on rates
– ECB: Christine Lagarde conference
– UK: Boe decision on interest rates – USA: unemployment benefits
– USA: January non-manufacturing ISM index – Quarterly Amazon
– Pensions: trade union government technical table – Enel: preliminary balance sheet for 2021
FRIDAY 4 FEBRUARY
– Germany: industry orders in December
– France: industrial production
– USA: unemployment rate and new employees – Climate: Presentation of the Reports of the Study Commissions on the impact of climate change on infrastructures and transport systems and on finance for sustainable infrastructures, with Enrico Giovannini, Minister of Infrastructure and Sustainable Mobility.
– Intesa Sanpaolo: 2021 results and presentation of the 2022-2025 plan with the CEO Carlo Messina.