(CercleFinance.com) – The Paris Stock Exchange is expected to open sharply down Monday morning, like other markets around the world, in response to the worsening energy crisis and its possible repercussions on the European economy.
Around 8:15 a.m., the ‘future’ contract on the CAC 40 index – September delivery – dropped 134 points to 6033.5 points, signaling an air pocket of more than 2% in the first trades.
The Russian gas giant Gazprom indicated Friday evening, after the close of European markets, that it no longer plans to restart the Nord Stream 1 gas pipeline as planned, after several days of maintenance work.
The announcement rekindled the specter of an energy shortage in Europe, reinforcing the scenario of an entry into recession and calling into question the ability of European leaders to find a credible response to the crisis.
‘The latest developments in this case are likely to lead to further destruction of demand and put politicians in a delicate situation as winter approaches’, reacts at RBC.
On the foreign exchange market, the worsening energy crisis is weighing heavily on the euro, which is now trading below 0.99 against the dollar, a first in nearly 20 years.
Concerns surrounding the development of the situation had already caused Wall Street to give ground Friday evening. The Dow Jones fell nearly 1.1% and the Nasdaq Composite ended down 1.3%.
The decline in Asian stocks on Monday only added to the uncertainty, as markets will not be able to hold on to developments on Wall Street, which will remain closed today for the Labor Day holiday. ‘.
The trend now seems to have become very unstable, as evidenced by the CBOE’s VIX volatility index, which is now well anchored above the 25 point mark.
Relatively optimistic last week following the announcement by the G7 countries of their desire to cap oil prices, investors are now cautious about the outcome of the crisis.
The return of certain investors to American Treasuries, which enjoy their status as a safe haven in times of crisis, is a good illustration of the markets’ reluctance.
Under these conditions, the participants will be very attentive to the economic indicators before the meeting of the ECB, which should raise its rates by at least 50 basis points at the end of its meeting on Thursday.
This Monday, operators will focus in particular on the PMI activity indices in the European services sector, as well as the latest retail sales figures in the euro zone.
Copyright © 2022 CercleFinance.com. All rights reserved.
Did you like this article ? Share it with your friends with the buttons below.
