PARIS (Reuters) – Wall Street is expected to fall and European stocks are hesitant mid-session on Tuesday, the rebound that supported equities in the morning running out of steam as investors position themselves for monetary policy announcements in the USA and UK.
Index futures show a 0.43% drop for the Dow Jones, S&P-500 and Nasdaq.
In Paris, the CAC 40 gained 0.15% to 6,435.2 points at 11:19 GMT. In Frankfurt, the Dax took 0.11% and in London, where the stock market remained closed on Monday for a public holiday, the FTSE index lost 0.79%.
The pan-European FTSEurofirst 300 index fell 0.06% while the Eurozone EuroStoxx 50 advanced 0.03% and the Stoxx 600 0.07%.
The latter recovered in session up to 0.85% thanks to the rebound of Wall Street on Monday and good corporate results in Europe, but caution regains the upper hand as the meeting of the Federal Reserve (Fed) approaches. and to a lesser extent the Central Bank of England (BoE), which seems to be against equity markets.
Investors expect the two institutions to continue the monetary tightening initiated in the face of inflation, but they fear that an overly aggressive policy will weigh down the global economy, already weakened by the war in Ukraine and the COVID-19 crisis. in China.
The rating agency Fitch has also lowered its growth forecast for China for 2022 from 4.8% to 4.3% and Hong Kong’s gross domestic product has contracted more than expected, to 4% at the end of the year. first trimester.
Among the indicators of the day, producer prices in the euro zone rose more than expected in March, by 5.3% over one year.
WALL STREET VALUES TO FOLLOW
In pre-market trading on Wall Street, pharmaceutical giant Pfizer retreated after maintaining its sales forecast for its oral COVID-19 treatment, Paxlovid.
Estée Lauder plummeted 10% in pre-market trading after slashing its full-year revenue target as COVID-19 restrictions in China weighed on demand for luxury goods.
VALUES IN EUROPE
The most cyclical sectors such as automotive (+1.15%) and energy (+2.19%) remained in the lead at mid-session despite the general renewed caution in Europe.
Banking stocks benefit from their side of the increase in yields: the European Stoxx index of the sector gains 1.12%.
BNP Paribas (+3.31%) is among the strongest risers in the CAC 40 after publishing a quarterly net profit above expectations, the strength of its market activities having more than offset the impact of the war in Ukraine.
BP advances by 2.86% after the announcement of a net profit at its highest since 2008 and an increase in its quarterly share buyback program.
Down, Covestro fell 7.03% after lowering its annual profit target, citing in particular the containment in Shanghai and the rise in energy and raw material prices.
RATE
In the bond market, the yield on ten-year US Treasury bills exceeded 3% on Monday for the first time since December 2018, a threshold it crossed again in the morning, ahead of the Fed’s announcements on Wednesday.
It is now down slightly, to 2.9692%.
In Europe, the session was marked by the brief passage of the ten-year German Bund yield to more than 1%, for the first time since June 2015. It now stands at 0.953% after a peak at 1.016%.
In its wake, the French ten-year hit its highest level since August 2014 at 1.544% in the morning before stabilizing at 1.474%.
CHANGES
In the foreign exchange market, the greenback fell 0.13% against a basket of benchmark currencies after hitting a nearly 20-year high last week on expectations of sharp rate hikes in the United States. euro is unchanged at 1.0502 dollars failing to take advantage of the decline in the US currency.
The pound sterling is up slightly against the dollar and the euro ahead of the Bank of England meeting on Thursday, which should result in a surprise rate hike of 25 basis points.
The Australian dollar benefited from the announcement by the RBA, Australia’s central bank, of a stronger than expected rise in its key rate to 0.35%.
OIL
Concerns about the consequences of health restrictions in China on demand weigh on the oil market: Brent fell 1.39% to 106.08 dollars a barrel and American light crude (West Texas Intermediate, WTI) of 1.47 % at $103.62.
(Written by Laetitia Volga, edited by Marc Angrand)
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