european stock Exchanges (follow here the index) to rise in the afternoon, after the positive opening of Wall Street that updates the new record (watch here indexes, Usa). In the meantime, is continuing to talk about the number one of the european central Bank, Mario Draghi, providing information on the economy of the Old Continent . The banker has announced an upward revision of the estimate of the gross domestic product in the euro zone by 2017, 1.7%, and inflation next year, to 1.3%. In addition, the central institution has decided to confirm until march 2017 asset purchases at the rate of 80 billion a month and extend until December 2017, the manoeuvre of quantitatve easing, while lowering the level of p urchases of 60 billion euros per month. Madrid registers the best performance, while Milan show a trend extremely nervous. Italy remains guarded special, especially after the political crisis that has opened in the last few days . The same Draghi said that the Country and its banks from the time they are vulnerable, but has thrown water on the fire by claiming that “the Government will deal with the vulnerability”. The FTSE MIB index which is pushed to earn nearly 1.5%; it has suddenly slowed down the pace after that Draghi has reiterated that there are favoritism for the mediterranean Countries. “Our mandate”, stressed Dragons – it’s not about any kind of national objective, but stability for the whole euro area”. The spread between BTp and Bund, which at the end of the morning had brought in the area of 155 points, has resumed its upward trend and stood in the area 162 points, however, for the other, even the alarm raised by Moody’s , which lowered the outlook, or the outlook on the debt securities of the Country from stable to negative, while confirming the judgment to Baa2, just two steps above junk. A Piazza Affari are in a net rise in the securities of the banking sector, with Banca Mps under the spotlight in the aftermath of the extension request to the Ecb for the recapitalization.
Ecb’s extension of Qe at the end of 2017. Reduced purchases to 60 billion monthly
Qe extended but the volume of purchases goes down
The Ecb has decided to confirm the Quantitative easing, the program of purchase of government and private securities in the Eurozone, up to march 2017, its original maturity date, the current volume of 80 billion per month, and has announced an extension of the same program from April to December 2017 (and beyond, if necessary”) a reduced volume of 60 billion per month. “If in the meantime, he indicated the Ecb – the prospects were to deteriorate or if the financial conditions were not more in line with a further progress towards an adjustment on a sustainable path of inflation, the governing Council intends to increase the program in terms of volume and duration. Net purchases of securities will be implemented together with the reinvestment of capital by those already purchased and in maturity”. Moreover, the Ecb has decided to modify some of the parameters of the plan, which will be announced in the press conference.
revised upwards the outlook for the economy and inflation in the euro area
The Ecb has revised upwards the outlook for the economy in 2017, and has also certified that the recovery in the Eurozone “is in some way reinforcing”, as stated by Dragons , which, however, has pointed out that there is still a need to be “maintained the high level of settlement money”. For the banker the growth of the economy should be continued also in the fourth quarter. The number one of the Eurotower has announced that have been revised upwards their estimates for growth in 2017, up from 1.6% expected in September, by 1.7%. The growth to 2018 has been confirmed at 1.6% while that for 2019 (the first estimate) is fixed to 1.6%. Confirmed, finally, to 1.7% for this year. Even the prospects for inflation have improved: next year the price index will record a progress of 1.3% instead of 1.2% as previously indicated.
However, the estimate for 2018 has been lowered marginally to 1.5% from 1.6%. while the first estimate for 2019 has been set at 1.7%, cl ose therefore to the objective of a rate close but below 2% in the medium term. The estimate for this year, finally, remains at 0.2%.
Spread BTp/Bund in the climb after the Ecb
It widens the differential between ten-year Italian and German after the Ecb announcement of the extension of the Qe program, to a more moderate, for nine months. The spread is first dropped, then recovered with a burst of flame up to 180 basis points, and then returned to the area 160, with the yields of ten-year German on the maximum in January, and those of the ten-year Italian more than 2%.
Euro in the swing after the decisions of the Ecb
The euro has reacted nervously to the Ecb decision to lengthen the time of the Qe program, but at the same time, start to reduce the amount. The european currency is rapidly climbing up to a maximum of 1,0,873 on the dollar to slip below the threshold of 1,07 (follow here the trend of the euro against the major currencies), while the greenback weakens against the yen (follow here the performance of the dollar against the major currencies). The market was already positioned on the extension of the program for 6-9 months but had not incorporated the hypothesis of a reduction of the amount of the purchases.
Futures cautious on Wall Street. Weekly benefits fell less than expected
In the U.s., meanwhile, futures Wall Street cautious, as the tension on the european fixed income also influence the Treasuries the Us, with yields on the rise. Yesterday, the Dow, the S&P 500 and the Russell 200 closed at record highs; the Dow Transports joined them for the first time in almost two years. For the index of 30 blue chip was the third session in a row on levels never seen before, and the twelfth by the victory of Donald Trump to the Us presidential election, and the twentieth in 2016. Investors are digesting the decision of the european central Bank to expand the program of purchase of bonds from march 2017 to December of the same year, most of the six-month extension expected. From April 2017, however, the value of the asset purchased drops to 60 from 80 billion euros per month. The governor Mario Draghi has to convince the market that this is not the same as the “tapering” that in 2013, the Federal Reserve announced sending in tilt the markets. On the macroeconomic front, the data on unemployment in the United States fell less than forecasts, but remained at levels in line with recent improvements in the labour market. The initial claims decreased by 10 thousand units to 258thousand, against the 268mila of the previous week. The figure stands on average below the level of 300 thousand to 92 weeks, the series best since the 1970′s. The index is still worse than expected: analysts had been awaiting a given decline in 255mila requests. A slight rise and finally the price of oil, with Wti that keeps you on the threshold of 50 dollars a barrel, but close to the lows of the week while there remain doubts about the fact that the production cuts approved by Opec are sufficient to balance the market.
The “Trumpflation” of the euro does not impact on the choices the Ecb
Auto and tlc well you buy. Milan salt Mps
Prevail purchases on the stock of the Old Continent (follow here the performance of the major indexes), with the tlc and the car and the average net rise (follow here the performance of eu sectors). The FTSE MIB in the last two sessions has returned to the levels before the Brexit over 18 thousand points, traveling in the positive territory and has accelerated the pace after the Ecb. Highlight the actions of the banks, accomplices also the reassurance of Dragons that ruled that can create risks for the euro. Mps is well bought in the aftermath of the board of directors has requested an extension to the Ecb of 20 January for recapitalisation. Meshed with the gear also Unicredit after some uncertainty, after the announcement of the sale of 32.8% of Bank Pekao in Pzu and Pfr to 2.4 billion euros. The operation will have a positive impact of about 55 basis points on the Cet1 ratio of the group as at 30 September 2016. Strong growth In other securities bank after some initial uncertai nty, with Bper, Banca, Ubi Banca, Bpm and Banco Popolare (also stopped in the auction in the morning) and Intesa Sanpaoloche mark the best performance. Purchases are rewards for the Fiat Chrysler Automobilesin line with the auto sector the european as well as Telecom Italia follows the trend of the tlc. Still on the rise in General after the flare-up of the past few days, on rumors of possible contacts between the General and Allianz, to sell to the German group Generali France, key assets of the business of the Lion, but the potential obstacle of Antitrust in the case of a big merger with Axa. The weak energy and oil.
(Il Sole 24 Ore Radiocor Plus)
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