Europe towards a start in decline, US-China tensions are frightening again

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(AFP)

President Trump has called a press conference on China, he will likely speak about Hong Kong. Oil still falling: demand remains weak. The Treasury will place up to 7.5 billion long-term government bonds benefiting from the decline in the spread

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The European stock exchanges, returning from various positive sessions thanks to the optimism for the end of the lockdowns and the hope of a rapid recovery of the economy, are heading towards a downward start to the session, penalized by the escalation of tensions between the United States and China. When there is about half an hour left to start trading in Europe, the futures of the Euro Stoxx 50 drop 1.1%, those of the London Ftse 100 0.6%, those of the Frankfurt Dax 30 0, 8%, those of the Cac 40 in Paris 0.7% and those of the Ftse Mib in Piazza Affari 0.5%.
American President Donald Trump announced today a press conference “on China” and on the eve it was enough to reset Wall Street’s earnings, which then closed down. The White House, which had already pointed the index against Beijing for the management of the coronavirus emergency, has poorly digested the new national security law imposed in Hong Kong, which jeopardizes the autonomy of the former British colony.
On the other hand, the American president has signed an executive order aimed at limiting the criminal immunity of social networks, with what was taken as a retaliation against Twitter, which had decided to warn users about potentially false messages from the president: the news may have repercussions on the trend of technological stocks and, in any case, it is a sign of an atmosphere far from relaxed.

Performance of the Btp / Bund spread

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Oil down, demand still weak
Oil declined in the last session of the week, after the weekly American inventory data revealed weak demand for crude oil and gasoline in the United States, the world’s leading consumer. This in a context in which tensions between Washington and Beijing are once again escalating and we try to understand what OPEC + decisions will be at the meeting in early June, with Russia that seems unwilling to make commitments on further production cuts to support the question. The July WTI sold 2.25% to $ 32.95 a barrel, while the Brent of the same maturity fell 1.4% to $ 34.8. Despite this, both contracts are about to close the fifth consecutive week of increases, driven by optimism about a rapid economic recovery once the health emergency is over.

Asian stocks under pressure, Tokyo down
Asian stock markets under pressure as investors await Washington’s response to China which has tightened control over the city of Hong Kong. The Nikkei closed with a 0.18% loss, while Chinese indices moved against each other. Future indices on Europe, Dax and Cac, open the day with a negative sign.

Yesterday was a very positive day on all the continental markets that continued to benefit from the bet on the recovery of the economy after the blockade imposed to contain the pandemic. Particularly good for Piazza Affari, which gained 2.46% on a day still marked by the clear repositioning of investors on Italian public debt following the announcement of the European Commission’s Recovery Fund on Wednesday.

The spread closed trading at 188 points, returning to the lows of the end of March. Compared to the peaks reached at the beginning of the month, the drop was 60 points. The yield of the ten-year BTp stood at 1.43% at the end of the session, on the lows at the end of March. Auspicious numbers for the placement of long-term securities scheduled for today with the Treasury which will place up to € 7.5 billion between 5 and 10 year BTp and CcTeu.



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