Rates for the first time below zero auction BoT to 12 months. Mediaset thud on the Stock Exchange – Il Sole 24 Ore

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This article was published on November 11, 2015 at 9:20.
The last change is the November 11, 2015 at 12:29.

It comes down for the first time in the negative performance of the annual BoT. In the auction today, in which the Treasury has placed 6 billion euro compared to the over 11 required by the market, the weighted average yield fell to -0.030%, down 5 basis points from the previous auction. However, high demands, with a ratio of supply and demand 1.87 (for a request for 11.207 billion) up from the previous month’s auction. The auction rules falls on November 13th. In recent weeks we had already been placed bonds with negative rates. Specifically CTZ to two years and semi-annual BoT.

The paradox of negative rates is closely related to the level (0.2%) who were brought interest rates on deposits ECB. One of the many initiatives that the Eurotower has taken to combat deflation and stimulate banks to use the huge liquidity at their disposal to finance households and businesses. A goal that the latter begins to take shape as shown by the resumption of lending to households and businesses. Of course not all the excess liquidity can be used to finance the real economy or invest in the markets and, with a deposit ECB remunerated at 0.2% negative, we need to find a “parking” alternative. Government bonds in the short term, as uneconomic because interest rates below zero, are a viable option to the extent that the yield below zero is still more favorable than the -0.2% of the ECB.

The placement of the Treasury benefits from a very favorable climate on the securities of fixed income in Europe. The bet on the Fed rate hike recently caused a sell-off on US government securities that also affected the European government bonds. After the rise in recent days, however, the rates came back down (hence the performance of the leading European government bonds).

On the equity the day is very positive (here the prices of the major stock market indices). In Milan we note the sharp drop in Mediaset, readmitted to trading on the Milan Stock Exchange after an initial freeze for excessive downward. Yesterday the company published the accounts of the third quarter, despite the positive news of the recovery in advertising sales, fell short of expectations for net profit: in the three months from July to September, the consensus of analysts expected a loss 48.9 million euro but the red was less than 54 million euro.

The continental markets are confronted with another round of data in chiaroscuro coming from China. Today in particular was announced the survey on industrial production rose by 5.6% in October, confirming a trend of weak growth for a country accustomed to double-digit increases.

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