Well, Europe is all set to close the week on a positive note assuming Donald Trump doesn’t decide to jawbone the country’s auto sector lower an hour before the European close like he did last Friday.
The optimism today stems of course from the migration “deal” reached Thursday evening. Needless to say, the “deal” (you can read it in full below) is a bit nebulous and seems destined to suffer the same fate as previous efforts to “solve” the immigration “problem” in Europe.
Markets may be reacting more to what looks like some semblance of coordination between Macron and Conte than they are to the prospect that anything has actually been resolved.
There was some “mobilizing” going on, ok?
You’ll recall that Macron had some rather harsh words for Italy last week, amid disputes over marooned migrant ships and inflammatory commentary from Matteo Salvini. You can read the full story on all of this here.
“They are saying the most provocative things and no one, no one, is outraged,” Macron fumed, at a speech in Brittany last week, adding that “we are getting used to all kinds of extremism from countries that a few years ago were just as pro-European as we are.”
Meanwhile, Merkel came into the Summit in an exceedingly precarious political position. Basically, she needed to come back from this pow wow with something to show CSU or risk her majority in parliament.
If you read the statement below, you’ll find a vague passage that says this:
Concerning the situation internally in the EU, secondary movements of asylum seekers between Member States risk jeopardising the integrity of the Common European Asylum System and the Schengen acquis. Member States should take all necessary internal legislative and administrative measures to counter such movements and to closely cooperate amongst each other to that end.
That’s probably for Merkel and as you can see, it’s hardly what one might call “comprehensive.”
In any event, Italy’s agreement with the text of the statement, however nebulous, was a step in the right direction or at least that’s how the euro and European assets took it.
The common currency has held onto gains logged when news that Italy had agreed to the deal first hit.
European shares are higher pretty much across the board:
Yesterday’s laggard (tech) is leading the way:
And the BTP-Bund spread, which had blown out to three-week wides, snapped a bit tighter:
So we’ll see if this has any kind of staying power. Somehow, I doubt it’s is going to “solve” anything, but hell, I guess anything was better than nothing when it came to the Summit. Expectations were pretty low and the tension is running high among the electorate:
Read the deal and decide for yourself…