MILANO – Asian equities recorded another weak day, weighed down by the $ 300 billion debt of the Chinese real estate group Evergrande, which ended up in a financial crisis that does not allow bankruptcy to be ruled out. Futures on Western markets are volatile, but just before the start of European trade they point to the slight upside both in the Old Continent and on Wall Street.
Conflicting indications came from the Chinese real estate group that partially allowed the Chinese price lists – which reopened today after a holiday period – to limit the damage. How does the Financial Times, Evergrande has found an agreement to respect the maturity of the interest on a bond to 2025 (for almost 36 million dollars owed); while the doubt remained about an offshore security, denominated in dollars, which tomorrow accrues 83.5 million in interest and which trades at 26 cents on the market, giving the measure of how great the uncertainty about its fate is. According to analysts interviewed by the City newspaper, it is possible that Evergrande misses the deadline, but in the following “grace period”, seek an agreement with investors in order to avoid direct bankruptcy and find a sort of soft landing. Meanwhile, China’s Central Bank has done its part to keep tensions at bay and injected 120 billion yuan ($ 18.6 billion) into the banking system through reverse repo agreements, surpassing maturities of 30 billion yuan. today: a move of 90 billion net, with which the PBOC also wanted to address the traditional greater demand for liquidity in view of the quarterly deadlines and the October holidays. PBOC had given short-term injections worth 100 billion yuan on both Friday and Saturday. Tokyo moves back by 0.67% final e Shanghai 0.29%, while Hong Kong earn 0.5%.
The attention of the markets is then focused on the board of the Fed that in the evening it could announce the timing of the tapering, the withdrawal of the purchase program of 120 billion dollars a month, put in place to counter the pandemic crisis. Jerome Powell has already anticipated that tapering should start within the year and most observers expect the discussion on the matter to be officially recognized today, but that the timing will be formalized only in November and then, in December, with a cut from 15 billion per month. There is also expectation to see how the governors’ expectations on rates will be distributed: with inflation forecast to rise, the ranks of those who see them rising as early as 2022 are likely to grow (they were 7 out of 18, in June meeting). The most surprising indications for the markets could arrive on this aspect, while the press release is expected to take note of the acknowledgment that the American economy has made “substantial progress” on inflation targets and to be on track for those of occupation.
In addition to the Fed, Istat reports on Italian industry and consumer confidence in the Eurozone are expected during the day. Meanwhile the Bank of Japan (BoJ) left its ultra-accommodative monetary policy unchanged, unsurprisingly, in its last meeting before the election of Japanese Prime Minister Yoshihide Suga’s successor. L’euro it is essentially stable against the dollar and slightly up against the yen: the single currency changes hands at 1.1724 dollars (-0.03%) and at 128.39 yen (+ 0.24%).
Quotations of Petroleum up this morning: the WTI is trading at 71.43 dollars a barrel with an increase of 1.39%, while the Brent rises to 75.32 dollars (+ 1.29%). The precious metals market is also rising: theoro spot is worth 1,778.83 dollars an ounce and marks an increase of 0.24% and also silver (+ 0.73% to 22.78 dollars) and platinum (+ 0.80% at 964.84 dollars).
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