A trader works at his desk at CMC Markets in London
by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected to fall again at the opening on Monday after a tumultuous week, marked by monetary policy decisions which shook the scenario of an imminent drop in interest rates in Europe and in the USA.
According to the first available indications, the Parisian CAC 40 should lose 0.30% at the opening, the Dax in Frankfurt 0.19% and the FTSE 100 in London 0.35%. The EuroStoxx 50 index is expected to decline by 0.21%.
After the monetary policy announcements from the American Federal Reserve (Fed), the Bank of England (BoE), the Bank of Japan (BoJ) and the Swiss, Swedish and Norwegian central banks, the opening week will be marked by the intervention of several central bankers, including Christine Lagarde, the president of the European Central Bank (ECB), this Monday at 1:00 p.m. GMT, then Philippe Lane, chief economist of the ECB, on Tuesday.
Investors will also have a myriad of macroeconomic data to analyze, including Friday’s publication of consumer price figures for September in the euro zone and the PCE price index in the United States for the month of August. Quarterly gross domestic product (GDP) figures from Britain and the United States are also on the agenda, as are retail sales in Germany.
These new statistics could influence the trend as fears about the trajectory of rates and the evolution of the economy have recently revived aversion to risky assets.
A WALL STREET
The New York Stock Exchange ended slightly lower on Friday in a context of rising bond yields which reached their highest level in 16 following the Fed’s announcements.
The Dow Jones index lost 0.31%, or 106.58 points, to 33,963.84 points.
The broader S&P-500 lost 9.94 points, or 0.23%, to 4,320.06 points.
The Nasdaq Composite fell 12.18 points (-0.09%) to 13,211.81 points.
In values, Ford Motor moved forward after the American auto workers union, the UAW, reported progress in discussions with the manufacturer.
Activision Blizzard took advantage of announcements from the British competition authority, the CMA, which declared that the remedy proposed by Microsoft “opened the door” to a green light for the proposed takeover of the publisher of “Call of Duty” .
On the Tokyo Stock Exchange, the Nikkei index gained 0.82% to 32,668.54 points, after its worst week (-3.37%) since the start of the year. The broader Topix takes 0.36% to 2,384.78 points as the close approaches.
The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) fell by 0.6%, close to a ten-month low.
In China, the Shanghai SSE Composite lost 0.44% and the CSI 300 lost 0.54%.
S&P on Monday lowered its forecast for China’s economic growth for this year to 4.8% from 5.2% previously, estimating that fiscal and monetary easing remains limited.
“Policymakers’ focus on controlling debt and financial risks has raised the bar for macroeconomic recovery,” notes Louis Kuijs, chief economist for the Asia-Pacific region at S&P.
In this regard, Friday’s publication of monthly PMI indices in China could constitute a test.
The dollar is stable (-0.009%) against a basket of reference currencies, after hitting a six-month peak on Friday, at 105.58 points.
The Japanese currency is at a ten-month low against the greenback, trading at 148.36 yen to the dollar.
The euro is practically unchanged (-0.04%), at 1.0648 dollars, the lowest for six months.
The pound sterling stands at $1.2239, also stalling after falling by more than 1% last week following the BoE’s decision to pause its rates.
The yield on ten-year US Treasury bonds is rising again, taking 2.6 basis points to 4.4642%, after easing slightly on Friday following a 16-year high.
The oil market is growing moderately, driven by the risk of a supply deficit at the end of the year: Brent is up 0.56% to $93.79 per barrel and American light crude (West Texas Intermediate, WTI) 0.43% to $90.42.
(Written by Claude Chendjou, edited by Bertrand Boucey)