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Market: Equities rebound, decline in bond yields


PARIS (Reuters) – Wall Street is expected to rise slightly on Monday and European stocks rose mid-session, benefiting from the ebb of fears linked to the rise in US interest rates, but this rebound could be limited as investors wait for Wednesday monthly inflation figures in the United States.

Futures contracts on the main New York indices predict an increase of 0.42% for the Dow Jones, 0.49% for the Standard & Poor’s 500 and 0.63% for the Nasdaq.

In Paris, the CAC 40 gained 0.94% to 6,533.19 points around 11:50 GMT. In London, the FTSE 100 takes 0.5% and in Frankfurt, the Dax advances by 0.72%.

The EuroStoxx 50 index is up 0.91%, the FTSEurofirst 300 0.71% and the Stoxx 600 0.76%.

The latter had lost 0.76% on Friday after the much higher than expected job creation figure in the United States in July, which gave credence to the hypothesis of a rise of 75 basis points in interest rates. the Fed in September.

While the first days of August were marked by a rise in US long rates, investors are now waiting for consumer price figures to try to see more clearly: the Refinitiv consensus expects a slowdown in inflation overall at 8.7% over one year but on a further acceleration of that of the “core CPI” index (excluding energy and food) to 6.1%.

“Employment statistics show us that inflationary pressures could persist much longer than expected today, unless we end up with a much harder recession”, notes Sebastian Paris-Horvitz, director of research at LBPAM. , in his daily note.

Equities are also finding near-term support in the US Senate’s adoption on Sunday of the Biden administration’s $430 billion “inflation cut” plan. ) and in the above-expected figure for Chinese exports in July (+18% year-on-year).

VALUES IN EUROPE

In Europe, the decline in bond yields observed after Friday’s surge benefited technology stocks, including the Stoxx index gaining 1.56%, the best sector performance of the day. ASML wins 2.61% in Amsterdam and Dassault Systèmes 1.83% in Paris.

The cyclical compartments of raw materials (+0.72%), financial services (+1.41%) and automotive (+1.01%) are also well oriented.

In corporate news, Veolia is up 1.5% after announcing an agreement to sell Suez’s UK waste treatment business to Macquarie for 2.4 billion euros.

RATE

Yields on US Treasuries, which jumped on Friday after the July job creations figure and its impact on rate expectations, are falling again, to 2.8029% for 10-year and 3-year securities, 2198% for two-year bonds.

The European bond market follows the movement with a decline of nearly five basis points for the ten-year German to 0.909% and four points for its French equivalent to 1.454%.

This drop is favored by the persistence of geopolitical tensions around Taiwan, as China has prolonged its military maneuvers around the island.

The ten-year Italian, on the other hand, is slightly up at 3.03%, a consequence of Moody’s decision to reduce its outlook on Rome’s sovereign rating to “negative” against “stable” due to the political situation.

CHANGES

The dollar, which had hit a ten-day high after the US employment figures, lost some ground with the decline in Treasury yields: the index which tracks its fluctuations against a basket of reference currencies fell 0.18% and the euro climbs back to 1.0187.

OIL

Oil prices remain on a downward trend, with fears of a slowdown in global demand continuing to dictate the trend despite the good economic indicators from the United States and China in recent days.

Brent fell 1.01% to $93.96 a barrel and US light crude (West Texas Intermediate, WTI) 1.07% to $88.06, not far from the six-month low hit Friday at 87.01 in session.

(Writing by Marc Angrand, editing by Kate Entringer)

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