PARIS (Reuters) – The main European stock markets are expected to rise at the opening on Monday, in a wait-and-see context before the publication of inflation data in the United States and Europe this week.
Futures contracts suggest an opening of 0.31% for the Parisian CAC 40, compared to 0.32% for the FTSE in London, 0.37% for the Dax in Frankfurt, and 0.43% for the EuroStoxx 50.
The path of the Federal Reserve’s rates continues to dictate the tone of the markets: investors have not paid attention to either the rise in inflation expectations suggested by the Michigan confidence indicator, published on Friday, nor to the fall in outlook for the United States’ rating to “negative” by the rating agency Moody’s.
Investors remain focused on the publication of key indicators in the United States this week: inflation on Tuesday, and retail sales – reflecting consumer resistance – on Wednesday.
Upward surprises on these indicators would be bad news, indicating that monetary policy may not be restrictive enough to bring inflation and activity under control.
In the euro zone, GDP and inflation are expected on Tuesday and Friday.
“Financial markets seem to think the tightening cycle is over: futures imply that another rate hike is only 30% likely, and that nearly three 25 basis point rate cuts will have take place before Christmas next year”, remind Rabobank strategists.
“There seems to be a disconnect between what the central bank is saying (higher for longer), and what traders are hearing.”
VALUES TO FOLLOW:
A WALL STREET
The New York Stock Exchange ended up on Friday, driven by technology and growth stocks thanks to the easing of bond yields, before a new week rich in indicators.
The Dow Jones index gained 391.16 points (+1.15%) to 34,283.1 points. The broader S&P-500 posted its biggest closing increase since September 19. It took 67.89 points, or 1.56%, to 4,415.24 points. The Nasdaq Composite recorded an increase of 276.66 points (+2.05%), its largest percentage increase since May 26, to 13,798.11 points.
IN ASIA
The Tokyo Stock Exchange ended stable on Monday, following profit-taking by investors. The Nikkei index finished moderately higher (+0.05%) at 32,585.11 points and the broader Topix finished unchanged at 2,336.61 points.
Semiconductor sector stocks rose in the wake of the Nasdaq’s sharp rise on Friday: Chip creation equipment maker Tokyo Electron jumped 1.74% and chip test equipment maker Advantest gained 1.53%.
Chinese indices are hesitant, with markets worried about the state of the Chinese economy even though a meeting planned for Wednesday between American President Joe Biden and his Chinese counterpart Xi Jinping raises hopes of an easing of tensions between the two countries. The Shanghai SSE Composite is holding up, the CSI 300 is down 0.2%, and the Hong Kong Hang Seng index is up 0.37%.
RATE
American yields are stable, in a context with poor publication of indicators.
The ten-year Treasury yield rises 2.2 bps to 4.6359%, while the two-year rate is static at 5.056%.
The German ten-year yield is unchanged at 2.713%.
CHANGES
Trading on the currency markets does not show a marked direction, with investors remaining wait-and-see.
The dollar is standing still against a basket of reference currencies, while the euro is immobile at 1.0692 dollars. The pound sterling gained 0.12% to 1.2237 dollars.
In Asia, the yen weakened by 0.15% to 151.72 yen per dollar, while the Australian dollar stagnated at 0.6369 dollars.
OIL
Oil is falling, worrying about the state of demand in the United States and China, while indicators published last week showed a slowdown in American oil consumption and a slump in Chinese exports.
Brent lost 0.75% to $80.82 per barrel, with light American crude (West Texas Intermediate, WTI) dropping 0.79% to $76.56.
NO MAJOR ECONOMIC INDICATOR ON THE AGENDA FOR NOVEMBER 13
(Written by Corentin Chappron, edited by Kate Entringer)
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