EUROPEAN EQUITIES EXPECTED TO START THE WEEK IN THE GREEN
PARIS (Reuters) – The main European stock markets are expected to rise on Monday and should take advantage of the partial reopening of Shanghai as well as the prospect of a rise in prices on Wall Street to begin a mainly technical rebound, concerns linked to inflation and at interest rates that remain very present.
Futures contracts on indices suggest an increase of 1.18% for the CAC 40 in Paris, 1.78% for the Dax in Frankfurt, 0.92% for the FTSE 100 in London and 1.65% for the EuroStoxx 50.
Futures contracts on the main New York indices are currently pointing to an increase of 0.9% for the Dow Jones, 1.35% for the Standard & Poor’s 500 and 1.63% for the Nasdaq.
In China, Shanghai reopened part of its metro network on Sunday after some lines had been closed for almost two months, a new step towards the complete lifting of the heavy confinement decided to curb the spread of the coronavirus.
If Beijing has for its part extended the use of telework for millions of employees, the news from Shanghai is all the more welcome as the announcement on Friday of a marked drop in one of the main key rates of the People’s Bank from China bolstered hopes for further stimulus.
Investors are also keeping an eye on the geopolitical situation, whether it is the conflict in Ukraine or the Asian tour of American President Joe Biden.
They will also monitor at 08:00 GMT the Ifo business climate index in Germany, which should once again be influenced by inflation as well as by tensions in supply chains.
“As long as the markets have not been reassured about the macroeconomic trajectory, it is likely that the sessions in the red will continue to follow one another. There will be, here and there, technical rebounds. But everything suggests that it will be ephemeral”, warns Saxo Bank in its morning note.
VALUES TO FOLLOW:
AT WALL STREET
The New York Stock Exchange ended in scattered order on Friday but above its lows of the day, at the end of another week in the red amid persistent concerns for inflation and the rise in interest rates .
The Dow Jones index gained 0.03%, or 8.77 points, to 31,261.9, the Standard & Poor’s 500, which spent most of the session in the red, ended virtually unchanged (+0, 01%) to 3,901.36 and the Nasdaq Composite fell 33.88 points (-0.30%) to 11,354.62.
The S&P 500 briefly went into the bear market, 20% below its January peak, before regaining ground, bringing its weekly decline to 3.05%.
The Dow Jones fell 2.9% over the week, its eighth consecutive week of decline, the first since 1932, while the Nasdaq fell 3.82%, signing for its part a seventh consecutive weekly decline, never before. seen since 2001.
The Nasdaq was heavily weighed down by Tesla, which fell 6.4%, while its chief executive, Elon Musk, called “totally unfounded” reports from the Business Insider newspaper according to which he had sexually assaulted a flight attendant. the air in a private jet in 2016.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index gained 0.98% and recorded its first closing at more than 27,000 points since May 6, taking advantage of the prospect of a rise on Wall Street and the sustained increase in financial stocks after the good results of the insurer Tokyo Marine, which won 7.64%.
In China, the Shanghai SSE Composite reduced its losses (-0.11%) after Joe Biden mentioned a drop in customs duties on certain Chinese products. However, the CSI 300 of the main Chinese capitalizations still lost 0.72%, penalized by the announcement of the highest number of COVID-19 cases in a month in Beijing.
CHANGES
The dollar is still losing ground against the other major currencies (-0.43%) after posting its first negative weekly performance in nearly two months, the buoyant effect of expectations of a rise in US rates having ended up fading.
The euro, which has already rebounded 1.5% last week, appreciated 0.42% against the greenback at 1.0604.
The Chinese yuan is benefiting from the decision of the People’s Bank of China (PBOC) to fix its short pivot 1.1% above that of Friday.
RATE
In the bond market, the yield on ten-year US Treasuries rose to 2.8333% after falling more than 20 basis points in three sessions.
Its German equivalent is following suit in early trading in Europe at 0.969%.
OIL
The oil market is benefiting from the fall in the dollar and the prospect of an increase in demand for fuels in China but also in the United States since next weekend, that of Memorial Day, will mark the start of the season for large summer trips around the country.
Brent gained 1.11% to 113.80 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.93% to 111.31 dollars.
METALS
The fall in the dollar and the hope of a recovery in Chinese demand are supporting copper prices (+0.90%).
Meanwhile, China’s benchmark iron ore price jumped nearly 7% at the open after India hiked export taxes on some commodities on Saturday in an attempt to curb rising prices. in its domestic market.
(Written by Marc Angrand, edited by Matthieu Protard)