Milan Leads Gains Ahead of Key Eurozone Data

Milan Leads Gains Ahead of Key Eurozone Data

Eurozone: Markets Rise on the Eve of New Macroeconomic Data — Milan Still in the Spotlight

On the eve of the release of new figures on German inflation and Italian industrial production, yesterday’s session (November 11) closed with another show of confidence across European markets, buoyed by fading fears over a potential U.S. government shutdown and growing expectations of an imminent interest rate-cutting cycle.

Italy once again stood out among the region’s leading markets, with Piazza Affari hitting another multi-year high and extending its year-to-date outperformance.

How Major Eurozone Indexes Moved Yesterday

It was a distinctly risk-on session for European equities, with broad-based gains and solid trading volumes following the strong surge earlier in the week.

Closing Performances — November 11, 2025

• FTSE MIB (Italy): +1.06% to about 44,362 points — a new high since 2007, extending Monday’s +2.3% rally.
• Euro Stoxx 50 (Eurozone blue-chip index): +1.0%
• DAX (Germany): +0.46% to 24,070.89 points
• CAC 40 (France): +1.36% to 8,165.17 points
• IBEX 35 (Spain): about +0.35% to 16,239 points

Overall, the Eurozone EU50 index gained roughly 0.6%, extending a recovery trend that has lasted several sessions.

Market Drivers:

• Financials and banks remained strong (notably in Italy and Spain), supported by tighter spreads and resilient profit expectations.
• Cyclicals and automakers (Germany and France) rebounded, aided by a more constructive outlook for global growth.
• Energy and oil services stocks — such as Saipem in Milan — benefited from stable oil prices and tactical buying.

Macroeconomic Picture: German Inflation and Italian Industrial Output

Germany — Inflation Slowing but Still Above Target
Recent data show that German inflation eased from 2.4% y/y in September to 2.3% in October.

• The slowdown was led by energy prices and normalization in industrial goods.
• Services remain the “sticky” component, with wage dynamics still robust.

Overall, Germany shows:

• Inflation slightly above the euro-area average (October flash: 2.1%).
• Weak industrial momentum, with euro-area industrial production down 1.2% m/m in August but still +1.1% y/y — Germany being among the weakest performers.

Italy — Industrial Output Slows, Growth Stalls
The latest hard data are less encouraging:

• Industrial Production (August 2025):
• –2.4% m/m (seasonally adjusted)
• –2.7% y/y (work-day adjusted)
• This was the sharpest drop in months, far below expectations.
• GDP (Q2): –0.1% q/q, ending seven consecutive quarters of growth.

Italy’s position:

• Fragile real growth, driven more by services and selective investment than by industry.
• Moderate inflation, in line with the euro-area average, but a non-negligible risk of stagnation.

Economic Stability Comparison

• Germany: Inflation somewhat higher but easing; cyclically weak industry; strong trade surplus and fiscal discipline.
• Italy: Inflation under control, but contracting industry and flat GDP; high public debt offset by a narrowing BTP-Bund spread (≈ 80–85 bps) and 10-year yield near 3.4%, signaling improved risk perception.
• France & Spain: Intermediate cases — modest growth, less industrial volatility, wider fiscal deficits.

In summary, the euro area enters the new data cycle with gradually receding inflation and highly uneven growth, with Italy still the industrial weak link but not in financial markets.

Focus on Piazza Affari: Top & Lagging Stocks

With the FTSE MIB above 44,000 points, the Italian market continues to benefit from the bank rally and the recovery of select industrial and luxury names.

Top Performers — November 11:

• Brunello Cucinelli +4.88%
• Stellantis +3.97%
• Saipem +3.85%
• Recordati +3.77%
• Amplifon +2.84%
• Campari +2.79%
• Nexi +2.78%
• Monte dei Paschi di Siena +2.66%
• Diasorin +2.31%
• Moncler +2.27%

A diverse mix:

• Luxury & lifestyle (Cucinelli, Moncler, Campari) — resilient global demand and strong pricing power.
• Energy & oil services (Saipem) — tactical play amid steady crude.
• Healthcare & med-tech (Recordati, Diasorin, Amplifon) — defensive sectors with structural growth.
• Digital payments & banks (Nexi, MPS) — supported by high rates but easing credit concerns.

Year-to-Date Leaders:

• Banca Popolare di Sondrio ≈ +89%
• BPER Banca ≈ +77%
• Banco BPM ≈ +70%
• Banca Mediolanum > +66%
• Azimut > +50%

Financials have clearly powered Italy’s 2025 outperformance.

Lagging Stocks:

• Inwit –11.81%
• Leonardo –2.07%
• Lottomatica –0.78%
• Unipol –0.37%
• Buzzi –0.30%
• Hera –0.25%
• Iveco Group –0.11%

Inwit led the losses amid company-specific factors, while Leonardo remained volatile due to defense exposure and industrial restructuring uncertainty.

Safe-Haven Assets and Bonds

While equities rally, investors still show caution.

Gold, Silver & Swiss Franc

• Gold: around $4,135/oz (+0.5%), lifted by Fed rate-cut expectations and U.S. shutdown fears.
• Silver: about $50.6/oz (+0.3%), volatile but strong long-term trend.
• Swiss franc: firmer, USD/CHF down, mild EUR/CHF appreciation.

Safe-haven demand remains robust — risk appetite in equities coexists with hedging against macro uncertainty.

Sovereign & Corporate Bonds

• BTPs: 10-year yield ≈ 3.4%; spread vs Bund ≈ 80–85 bps, well below 2024 highs.
• Corporate investment-grade and covered bonds: benefit from expected rate cuts and low default risk outlook.

The Italian short-to-medium curve (3–5 years) remains appealing for investors seeking positive real yields with limited duration risk.

Where It Makes Sense to Invest in Italy

(General information only — not personal advice.)

Given the current setup, a balanced yet defensive strategy looks most appropriate.

1. Short-Term Italian Government Bonds (3–5 yrs)

• Tighter spreads and lower perceived risk.
• Still-attractive real yields with inflation around 2–2.5%.
• Low duration limits capital loss risk.

Role: Core defensive euro component.

2. Corporate Investment-Grade & Covered Bonds

• Often offer higher yields than BTPs of similar maturity.
• Strong issuers (IG corporates and systemic banks).
• Good balance between prudence and return.

Role: Second defensive pillar to enhance bond portfolio yield.

3. Gold, Silver & Swiss Franc — “Parachute” Assets

• Rising again amid rate-cut bets and geopolitical uncertainty.
• CHF trend still appreciative.
• Hold 5–15% as a hedge against inflation or shock events.

4. Italian Equities — Focus on Resilient Innovation
Even with weak real growth, the Italian market is diversified:

• Tech and digital payments (e.g., Nexi) benefit from secular trends.
• Healthcare & med-tech (Amplifon, Diasorin, Recordati) combine defense and growth.
• High-end luxury (Cucinelli, Moncler) acts as a global brand safe haven.

Indicative Portfolio Structure:

1. Defensive Core (60–70%) — BTP 3–5 yrs, IG corporates, covered bonds
2. Safety Buffer (10–20%) — gold/silver, CHF-denominated assets
3. Growth Engine (15–25%) — Italian tech, healthcare, and luxury equities

In conclusion: Yesterday confirmed a familiar paradox — a fragile real economy but booming financial markets. Italy remains at the forefront of equity performance yet exposed to industrial weakness. On the eve of key macro releases, a prudent investor approach should combine selective equity exposure with disciplined bond positioning and a measured allocation to safe-havens for stability.

The information in this article is for informational purposes only and does not constitute financial advice or an investment solicitation. Opinions expressed reflect the author’s view at the time of writing and may change without notice. The author accepts no liability for any decisions made based on this content.