European stock exchanges open – 20 June 2024
- 09.05 am Ftse Mib slightly rising with Iveco and Unicredit. Focus on the auction of French government bonds
- 08.20am Europe expected to rise. Focus on BoE, Bns and Norges Bank
The European stock markets accelerate upwards, including the business market where the Ftse Mib index marks a +0.65% to 33,437 points thanks above all to the push of Azimut (+1.97%), Saipem (+1.15%), Italgas (+1.22%) and Hera (+1%). The BTP/Bund spread remains above 150 at 154.3 basis points after, as widely expected by economists, the Norges Bank left rates unchanged at 4.5%, while the Swiss National Bank cut them by 25 basis points all ‘1.25%. The Swiss National Bank said it will continue to closely monitor inflation and, if necessary, adjust its monetary policy to ensure that inflation remains within the range compatible with price stability in the medium term.
Brent remains near the multi-week high of $85.82
The price of Brent oil rose 0.31% to $85.33 a barrel, remaining close to the multi-week high of $85.82 reached in the previous session. “Despite the unexpected increase in US inventories at the beginning of the week, which highlighted demand concerns, the price per barrel remained relatively stable,” points out Ricardo Evangelista, senior analyst at ActivTrades. “Supply anxieties continue to dominate investors’ minds due to geopolitical instability. Operators are increasingly predicting an all-out war between Israel and Hezbollah, increasing the likelihood that the regional conflict will intensify and involve the entire area. Such a scenario could disrupt production in the Gulf region and potentially block traffic through the Suez Canal. In this context, the price of a barrel is expected to remain supported around current levels.”
09.05 am Ftse Mib slightly rising with Iveco and Unicredit. Focus on the auction of French government bonds
European stock markets rise slightly at the start of the session. The Dax advances by 0.26%, the Cac40 by 0.25%, the Ftse100 by 0.04% and the Ftse Mib by 0.35% to 33,336 points. The BTP-Bund spread remains above the 150 point threshold at 155 basis points, while the yield on the 10-year BTP is just under 4% at 3.97%. The European Commissioner, Paolo Gentiloni, invited Italy to play on two fronts: one relating to prudent budget policies and the other linked to public investments, points out Fabrizio Barini of Integrae sim. According to the European minister, a minimum adjustment of public finances of 0.5% of GDP per year is expected for countries under infringement proceedings. «A few years ago the effort would have been more severe, but it’s not as if there isn’t a need for an adjustment in a country like Italy with a deficit/GDP above 7% and a debt/GDP above 135%: both need to be faced”, commented Gentiloni. An assist for Italy which continues to stand out in Europe, positively, for growth, inflation control and political stability, underlines Barini.
France will hold its first bond auction after announcing early elections
France will hold its first bond auction since President Emmanuel Macron called snap parliamentary elections for June 30/July 7, experts at Unicredit Research recall, calling the auction a key event of the day. If demand is solid, they add, “we will consider it positive for the banks and a positive signal for the primary market”. Paris offers up to 10.5 billion four Oat and up to 2.25 billion indexed. Spain is also active in the primary sector, offering three Bonos for a maximum amount of 5.5 billion.
In Milan Iveco, Stellantis, Unicredit and Iren did well. Tim was more secluded on the day of the board of directors meeting. Relatech and Seri Industrial fly
On the Milanese list, Iveco (+0.56% to 10.74 euros) and Unicredit (+0.82% to 34.35 euros) are doing well. Instead Tim, which brings together an ordinary board of directors, changes hands at 0.2247 euros (+0.135). The TLC giant is working to close the sale of the access network to KKR on July 1st, as the CEO, Pietro Labriola, said, meeting some investors on June 19th at the Mediobanca headquarters, according to what was reported by a source close to the situation . Labriola also reported that the company could evaluate M&A operations both in the enterprise segment, acquiring a player active in IT services, and in the consumer segment.
Stellantis was well purchased (+0.74% to 19.12 euros). Overall new car sales in the European Union fell 3% in May compared with the same month in 2023, the second decline this year, and fell 2.6% in the broader region that includes the EU, Great Britain and the European Free Trade Association (EFTA), according to Acea.
And if Iren (+1.10% to 1.92 euros) signed a new 200 million euro green loan with the EIB, Gemini BidCo declared that it had entered into a purchase and sale agreement for a 53.24% share of Relatech (theoretical +12.7%) at a price per share of 2.53 euros. Upon completion, Gemini BidCo will launch a mandatory tender offer for the remaining shares aimed at delisting. The closing is scheduled for the end of July.
Seri Industrial also flies (+6.88% to 4.04 euros) which acquired 98% of Industria Italiana Autobus from Invitalia and Leonardo (-0.22% to 22.59 euros). Invitalia will retain a 2% stake in the company. Industria Italiana Autobus is an Italian company that manufactures public road transport vehicles under the Menarinibus brand. The operation will allow Seri Industrial to become the first fully vertically integrated European player: from the procurement and processing of raw materials, through the production of lithium battery cells and systems, up to the design and production of electric vehicles and recycling of batteries at the end of their life.
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08.20am Europe expected to rise. Focus on BoE, Bns and Norges Bank
European stock markets are expected to rise at the start of the session. The future on the Eurostoxx50 marks +0.29%. Closed for holidays on June 19th, Wall Street reopens (futures on the Dow Jones +0.16% and on the S&P500 +0.28%). The euro is weak against both the dollar (-0.04% to 1.073) and the pound (-0.01% to 0.8448). The BoE’s monetary policy meeting should end with the confirmation of the cost of money at 5.25%, however preparing the ground for an expansionary move on rates which could materialize as early as August. Released on June 19, the May inflation data in the United Kingdom showed a decline to the annual rate of 2%, the BoE’s target, for the first time since 2021. Before the Bank of England, the central institutes of Switzerland and Norway. The Swiss National Bank is expected to cut its key rate by a quarter of a point to 1.25%, with a further cut seen as possible in September. While Norges Bank is expected to confirm rates at 4.50%.
German producer prices in May fall by 2.2% year-on-year
There were few macro data of the day. Already published, German producer prices in May fell by 2.2% year-on-year (previous: -3.3% year-on-year). At 2.30pm, requests for weekly unemployment benefits in the United States (estimate 235 thousand versus 242 thousand last week) and the PhillyFed for June (estimate 4.8% versus 4.5% in May) are on the agenda. On June 19, the Atlanta Fed released the GDPNow model’s estimate for real GDP growth (seasonally adjusted annual rate) for the second quarter of 2024, which was equal to 3.1%. «While not an official estimate, the GDPNow model is in fact a current estimate of real GDP growth based on economic data available for the current quarter without making subjective changes to the model itself. The estimate is therefore based exclusively on the mathematical results of the model”, explains Antonio Tognoli of Cfo Sim.
Watch out for France’s placement of government bonds
The yield on the 10-year BTP rises to 3.95% in a market that remains volatile amid political uncertainties. The medium and long-term placement of government bonds by France will be followed with particular attention, given the recent surge in yields and with a particularly uncertain political situation in view of the early elections. Paris offers up to 10.5 billion four Oat and up to 2.25 billion indexed. Spain is also active in the primary sector, offering three Bonos for a maximum amount of 5.5 billion. The Italian Treasury will communicate in the evening the details of the placement of short and index-linked BTPs on the agenda next Tuesday.
In Milan, pay attention to Tim, Stellantis, Iren, Leonardo and Seri Industrial
On the Milanese stock exchange, keep an eye on Tim who is bringing together an ordinary board of directors and is working to close the sale of the access network to KKR on July 1st, as the CEO, Pietro Labriola, said while meeting some investors on June 19th at the Mediobanca headquarters, according to a source close to the situation. Labriola also reported that the company could evaluate M&A operations both in the enterprise segment, acquiring a player active in IT services, and in the consumer segment.
Focus then on Stellantis. Overall new car sales in the European Union fell 3% in May compared with the same month in 2023, the second decline this year, and fell 2.6% in the broader region that includes the EU, Great Britain and the European Free Trade Association (EFTA), according to Acea.
And if Iren signed a new 200 million euro green loan with the EIB, Seri Industrial took over 98% of Industria Italiana Autobus from Invitalia and Leonardo. Invitalia will retain a 2% stake in the company. Industria Italiana Autobus is an Italian company that manufactures public road transport vehicles under the Menarinibus brand. The operation will allow Seri Industrial to become the first fully vertically integrated European player: from the procurement and processing of raw materials, through the production of lithium battery cells and systems, up to the design and production of electric vehicles and recycling of batteries at the end of their life.
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