by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to rise on Monday and European stocks are also moving in the green mid-session, the positive trend being again supported by hopes of a lull in the Federal Reserve’s rate hike. (Fed), while the publication of quarterly corporate results continues. Futures on New York indices signal an opening of Wall Street up 0.75% for the Dow Jones, 0.76% for the Standard & Poor’s 500 and 0.51% for the Nasdaq. In Paris, the CAC 40 takes 1.83% to 6,145.72 around 12:10 GMT. In Frankfurt, the Dax is up 1.76% and in London, the FTSE gains 0.59%.
The pan-European FTSEurofirst 300 index rose 1.6%, the eurozone’s EuroStoxx 50 1.73% and the Stoxx 600 1.63%.
With the Fed due to meet next week, the Wall Street Journal reported on Friday that the US central bank may debate a smaller rate hike in December in November.
Investors still expect the Fed to hike rates by 75 basis points on November 2 and then by the same amount in December, but the likelihood of such a hike for the last month of the year has significantly increased. ebbed, according to the FedWatch barometer, which sees the cost of credit now peak at 4.87% against more than 5% at the start of last week.
In addition to the Fed, decisions from the European Central Bank are expected on Thursday, those from the Bank of Canada on Wednesday and those from the Bank of Japan on Friday, which could lead the market to observe some caution.
“While the fact that Fed officials have begun to show a horizon towards the end of the rate hike is encouraging, such a pause will remain conditional on lower inflation and a slowing labor market. has not yet been observed in the data,” warned Mark Haefele, chief investment officer at UBS Global Wealth Management, warning of possible disappointment over the sustainability of the current rebound.
In terms of economic statistics, private sector activity in the euro zone suffered its sharpest contraction in almost two years in October with a composite PMI index down to 47.1 in the first estimate after 48.1 in September.
In the United Kingdom, economic activity in the private sector also remained in contraction in October, the composite PMI index having come out at 47.2, the lowest for 21 months, while the political crisis in the country is exacerbating concerns about inflation and rising interest rates.
WALL STREET VALUES TO FOLLOW
VALUES IN EUROPE
In Europe, risk appetite is primarily benefiting the utilities sector (+2.97%) while virtually all sectors are in the green.
In corporate news, Atos is up 1.72% on the back of expressions of interest in its Tech Foundations business.
Imerys (+5.36%), he is driven by the announcement of the launch of a lithium exploitation project in Beauvoir (Allier) which he hopes to become “a major player” in the sector in Europe.
The Belgian chemical group Solvay takes 2.61% thanks to the increase in its annual forecasts.
Credit Suisse gains 2% after agreeing to pay 238 million euros to settle a tax evasion case.
On the downside, some companies exposed to China are neglected after the reappointment of President Xi Jinping as head of the Chinese Communist Party for a third term by a committee whose ideological vision could take precedence over economic growth. The Dutch group Prosus fell 14.07% in the wake of Hong Kong-listed technology companies, while the insurer Prudential and the bank HSBC, which have significant activities in Asia, lost 7.71% and 1, respectively. 43%.
Bond yields are supported by hopes that the pace of rate hikes will slow early next year. That of the ten-year German Bund dropped 13 basis points to 2.31% when it had reached a peak since August 2011 at 2.532% on Friday before information from the Wall Street Journal.
In the United States, the yield on ten-year Treasury bonds fell about five points to 4.162% after hitting a peak since 2007 at 4.37% on Friday.
EXCHANGES The dollar advanced 0.25% against other major currencies, including the euro, which fell 0.09% to 0.9851 dollars.
The pound rose slightly to 1.1315 dollars (+0.12%) as former British Prime Minister Boris Johnson withdrew from the race to succeed Liz Truss, leaving the field open to the former Finance Minister Rishi Sunak, now favorite for the job.
The Japanese currency is volatile, trading at 148.95 yen to the dollar, after touching a two-week high in session at 145.61, suggesting that Tokyo has intervened in the market again after an alleged intervention on Friday.
Oil prices are penalized by Chinese statistics which show that the country’s crude demand remained lackluster in September amid health restrictions.
Brent fell 0.91% to 92.65 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.32% to 83.93 dollars.
(Written by Claude Chendjou, edited by Kate Entringer)
Copyright © 2022 Thomson Reuters