PARIS (Reuters) – The main European stock markets are expected to fall on Monday after the decline suffered by Wall Street on Friday in reaction to the monthly statistics of the American employment which showered the hopes of a slowdown in the rise of the rates, as much as the coming week is likely to fuel both the fear of persistence of inflation and that of a recession.
The geopolitical news could also encourage the markets to be cautious, pending the reaction of Moscow to the new setback suffered this weekend with the explosion on the Crimean bridge.
Index futures suggest a decline of -0.73% for the Dax in Frankfurt, -0.35% for the FTSE 100 in London and -0.8% for the EuroStoxx 50. As for the CAC 40 in Paris, it could yield up to 0.9% according to the first indications available.
Volumes could be reduced by the absence of some American investors, the day being a public holiday in the United States even though Wall Street will be open.
The monthly US jobs report released on Friday, marked by a moderate decline in job creation, a drop in the unemployment rate and a 5% year-on-year rise in wages, disappointed those who had hoped for signs of deterioration. economic conditions would prompt the Fed to slow rate hikes.
Result: a further rise of three-quarters of a point in early November is now considered nearly 90% likely according to the real-time barometer FedWatch.
The European Central Bank (ECB) could also opt for a hike of 75 basis points on October 27 and the Bank of England could go up to 100 points, or even beyond, after the turbulence of the past few weeks.
“We are at the heart of the largest and most synchronized tightening of global monetary policies in more than 30 years,” said Bruce Kasman, director of economic research at JPMorgan, for whom “persistently high inflation and awareness of increasingly clear of the need to slow down the labor market should lead central banks to new major decisions”.
The week that is beginning will be animated successively by the new economic forecasts of the International Monetary Fund (IMF) on Tuesday, by the figures for producer prices (Wednesday) and consumer prices (Thursday) in the United States, and by the start of the period of the publication of results on Wall Street on Friday with those of four of the main American banks.
IN WALL STREET
The New York Stock Exchange ended sharply lower on Friday after the publication of the monthly employment report and the warning from Advanced Micro Devices, two factors unfavorable to technology and growth stocks.
The Dow Jones index fell 2.11%, or 630.15 points, to 29,296.79, the Standard & Poor’s 500 lost 103.90 points, or 2.77%, to 3,640.62 and the Nasdaq Composite lost fell 420.91 points (-3.80%) to 10,652.41.
The S&P of technology stocks fell 4.14%, penalized both by the prospect of a rise in the cost of credit and by the disappointing announcements of AMD, which gave up 13.9%.
Over the whole week, the Dow rose by 1.99%, the S&P-500 by 1.51% and the Nasdaq by 0.73% after three consecutive weeks of decline.
Index futures so far suggest an open down around 0.4%.
IN ASIA
The Tokyo Stock Exchange is closed, the day being a public holiday in Japan.
In China, where the markets had remained closed for a week for the national holiday, the Shanghai SSE Composite lost 0.39% and the CSI 300 0.9%.
The Chinese semiconductor index fell 5.91% after the new restrictions on the export of high technologies decided by Washington.
CHANGES
The dollar is stabilizing against the other major currencies (-0.04%) after three consecutive sessions of increases which allowed it to rise to its level of ten days ago.
The euro is trading at 0.9738 dollars.
The yuan, he fell after the week of closing Chinese markets, to 7.1122 for a dollar. The Caixin-S&P Global China Services PMI released on Saturday showed a contraction in sector activity for the first time since May.
OIL
The oil market is suffering profit taking after hitting a five-week high on the prospect of a sharp cut in OPEC+ supply.
Brent fell 0.86% to 97.08 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.83% to 91.87 dollars.
Both had reached their highest level since August 30 at the very beginning of the day.
(Written by Marc Angrand)
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