MILANO – Stalemate on global markets, with the president of the ECB, Christine Lagarde, who has not hinted at the possibility of a pause in rate hikes by the Eurotower admitting that there is still no certainty about having reached the peak of the core inflation. The tech sector saw gains evaporate in the preceding session (the Nasdaq closed weak after a positive session trailed by record-breaking Apple, which however later erased the gains), while activity in the services sector remained expanding in the United States, in May, but the data disappointed expectations. Oil prices are also holding back after gains linked to Saudi Arabian production cuts. Surprise from Australia with interest rate hike above estimates to fight inflation: Aussie dollar jumps.
The Btp Valore also runs on the second day: orders over 1.4 billion
Tokyo closes higher
Btp Value at 3 billion
On its second day of placement, the Btp Valore, the new instrument created by the Treasury exclusively for retail customers, exceeded 3 billion orders by mid-day. On the first day, orders reached 5.432 billion.
The drop in oil prices continues, down by more than 2% despite the extension of the cuts decided by OPEC+ with concerns about global growth that prevail over the decisions taken by the producing countries. WTI drops 2.11% to 70.6 dollars a barrel, Brent drops 2.3% to 74.9 dollars. Shares rose yesterday following a decision by Saudi Arabia, the world‘s top exporter, to cut production by 1 million barrels per day (bpd) to 9 million barrels in July, only to lose momentum at the end of the day . What prevails, analysts explain, are fears about demand for a possible risk of recession after the disappointing data on US PMIs.
European stock markets weak in the middle of the session
The European stock exchanges are proceeding weakly, with investors’ eyes focused on the next moves by central banks to counter inflation which is still too high. Paris loses 0.24%, Frankfurt falls 0.15% and London loses 0.34%. Milan also fell, leaving 0.39% on the ground.
The Btp Valore cuts 2 billion
The Btp Valore continues at full speed also on the second day of placement. Subscriptions on government bonds at increasing rates reserved for retail investors exceed 2 billion euros in value at mid-day.
Mixed closures in Asia, weak China
Asian stocks close mixed, Tokyo doing well, Chinese stocks in the red after the slowdown in the US services sector strengthened the prospect that the Fed would suspend interest rate hikes at its meeting scheduled for next week. Tokyo stocks closed higher after Japanese real wages contracted for the 12th consecutive month, reinforcing expectations that the Bank of Japan will maintain its ultra-loose monetary stance. The optimism linked to the solid season of earnings also pushed the Japanese lists. The Nikkei gains 0.88% to 32,500 points, on the highs of the last 33 years, the Topix rises by 0.74% to 2,236.18 points. On the other hand, the Chinese markets were bad in the end: Shanghai lost 1.15% with 3,195.34 points while Shenzhen lost 1.58% with 10,773.45. Weak Hong Kong at -0.11% with 19,088.00. On the other hand, the Kospi index of Seoul was positive with +0.54% at 2,615.41 points and that of Taiwan +0.28% with 16,761.66, where the TWII was also driven by a 0.9% increase in Chip maker TSMC shares after posting a better second half of 2023 thanks to a recovery in chip demand.
Europe ahead uncertain
European stock exchanges move under the banner of uncertainty with investors looking at future moves by central banks. Lagarde’s last words leave little room for hope that the rate-tightening policy will experience a pause. The area index of the Old Continent, the stoxx 600, sails on parity with weak tech and energy. Among the individual squares, Milan loses 0.2% below 27,000 points. Speculation on banking risk once again turns the spotlight on Mps (+2.64%) with Bper pivot (weak at -0.56%) . Banco Bpm was also in the light (+1.4%). Paris and Frankfurt are flat while London is down 0.26%. The spread continues to rise with the differential between Btp and Bund at 177 points while the yield on the Italian ten-year bond is stable at 4.10%. Among the commodities, oil is in decline with the WTI below 71 dollars a barrel (-1.9%) and the Brent just above 75 dollars (-1.6%). There was also a decline in gas, the price of which is below 27 euros per megawatt hour (-6%). In terms of exchange rates, the euro remains at 1.07 dollars.
Unicredit, 10 billion against inflation
UniCredit launches a new edition of the ‘UniCredit for Italy’ plan to support the country with initiatives for a total potential value of 10 billion euro. In detail, 4 billion for the financing of private and household consumption and 6 billion for new loans for businesses in the tourism sector, the excellence of Made in Italy and special economic zones. The aim is to support the consumption of individuals and families struggling with inflation, as well as to provide new resources for the development of specific sectors and territories.
The Btp Valore also runs on the second day: orders over 1.4 billion
The race to purchase the Btp Valore by small savers continues. After the boom in demand on the first day of placement, there is once again considerable interest in the new security offered by the Treasury. Just over an hour after the start of the second placement day, orders exceeded 1.4 billion euro against over 52,000 contracts signed. Yesterday, on the first day of the offer, the Treasury’s orders had reached 5.432 billion euros against over 185,000 signed contracts. Subscription of the Btp Valore began yesterday and will end on Friday 9 June, unless closed early. The bonds have guaranteed minimum coupon rates for the first issue of 3.25% for the first and second year and 4.00% for the third and fourth year. The Btp Valore is reserved for the retail market only and provides for six-monthly nominal coupons and a 4-year maturity with an extra final loyalty bonus equal to 0.5% of the invested capital.
Microsoft fines $20m for child data
Microsoft will have to pay a $20 million fine to overcome allegations by US authorities of having collected personal data of minors without parental consent. According to the US Federal Trade Commission from 2015 to 2020 the group would have collected data from children under the age of 13 who signed up for its Xbox game system without parental permission, keeping the information. To open an account, users had to provide their first and last name, an email address, and date of birth. A practice that, for the Ftc, violated the Children’s online privacy protection act which instead requires parental consent.
Weak Milan, Montepaschi shoots
The Milan Stock Exchange opens slightly down at -0.31% with 26,763.03 points, in line with the other European financial centres. Yesterday, speaking in the commission of the EU Parliament, the governor of the ECB Christine Lagarde made no mention of an imminent halt to the interest rate hike policy to curb inflation. In Piazza Affari, at the start of negotiations, some banking and industrial stocks suffer: Pirelli -1.31% on the long wave of controversy over the pact with Chinese shareholders and the possibility that the government uses golden power, Stellantis -1.15% , Leonardo -0.68%, Bper Banca -0.64% on the day in which there were rumors about a possible interest of the group in taking over the state stake in Mps. Monte Paschi, on the other hand, gains 2.55%, and energy stocks and utilities also do well: Hera +0.63%, Italgas +0.45%, Snam +0.36%.
European stock exchanges start weak
European stock exchanges open weakly, with their eyes on the next moves by central banks to counter inflation that is still too high. Yesterday the president of the ECB, Christine Lagarde, in a hearing before the Economic Affairs Committee of the European Parliament reiterated that the ECB’s bullish line on interest rates will go ahead In the first negotiations in London, the Ftse 100 index dropped by 0.04% to 7,595.50 points, in Frankfurt the Dax dropped 0.10% to 15,948.50 and in Paris the Cac40 dropped 0.21% to 7,186.12 points. In Piazza Affari, the Ftse Mib index lost 0.28% to 26,780.64 points. German industrial orders this morning fell 0.4% in April, an improvement on the dramatic 10.9% plunge the previous month, but still indicative of the difficulties of the industrial sector in Europe’s largest economy.
The spread starts up again to 175 points
The spread between Italian BTPs and their German Bund counterparts opens at 175 points, up from 167 points at yesterday’s close. The yield on ten-year government bonds rises to 4.154%.
Tokyo closes higher
Tokyo stocks closed higher after Japanese real wages contracted for the 12th consecutive month, reinforcing expectations that the Bank of Japan will maintain its ultra-loose monetary stance. The optimism linked to the solid season of earnings also pushed the Japanese lists. The Nikkei gains 0.88% to 32,500 points, on the highs of the last 33 years, the Topix rises by 0.74% to 2,236.18 points.
Positive Asian stock exchanges
Asian stocks moved higher after a slowdown in the US services sector boosted the prospect that the Fed would halt interest rate hikes at its meeting next week. Tokyo advanced by 0.72% while in China, where economic and political prospects remain very uncertain, Shanghai decreased by 0.06% and Shenzhen by 0.01%. Hong Kong did well at +0.72% and also Seoul +0.54% and Taiwan +0.15%, where TWII was also boosted by a 0.9% increase in the shares of chipmaker Tsmc after registration of a better second half of 2023 thanks to a recovery in demand for chips.
Slightly higher opening for the euro
Opening slightly up for the euro above 1.07 dollars. The single currency is traded at 1.0726 dollars (+0.12%) and 149.58 yen (+0.06%). Dollar/yen down to 139.46 (-0.09).
Wall Street, little moved futures
Wall Street futures are little moved after yesterday’s weak close in New York. Dow Jones futures are up 0.05%, S&P 500 futures are up 0.06% and Nasdaq futures are up 0.03%. Economic activity in the services sector continued to expand in the United States in May, but the data fell short of expectations. The ISM Servizi, drawn up by the Institute for Supply Management fell to 50.3 from 51.9 points in April, against the expected 52.4 points. The new orders component above all weighed negatively. Values below 50 points indicate a phase of economic contraction and the ISM Servizi has not fallen below this threshold since December.
Oil slows down the race
Oil prices down on Asian markets, with WTI futures returning below 72 dollars a barrel to 71.9 dollars (-0.28%) and those on Brent at 76.4 dollars (-0.42%) , erasing gains made after Saudi Arabia pledged to cut production by another 1 million barrels per day starting in July. The decision, taken at the OPEC+ meeting last Sunday, would bring the country’s production level to around 9 million barrels a day, the lowest in recent years. However, the new cuts may not have a significant impact as production levels in other member countries including Russia, Nigeria and Angola remained high.