by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to fall on Monday and European stock markets also fell mid-session in a context of caution at the start of a week marked by the decisions of three major central banks, the publication of indicators on inflation and employment, as well as a new set of company results.
Futures on New York indices signal an opening on Wall Street down 0.63% for the Dow Jones, 0.84% for the Standard & Poor’s 500 and 1.15% for the Nasdaq. In Paris, the CAC 40 fell by 0.48% to 7,063.15 around 12:50 GMT. In Frankfurt, the Dax gives up 0.51%. In London, the FTSE stands out with a modest gain of 0.06%.
The pan-European FTSEurofirst 300 index fell by 0.46%, the euro zone’s EuroStoxx 50 by 0.85% and the Stoxx 600 by 0.49%.
The US Federal Reserve (Fed) begins a two-day monetary policy meeting on Tuesday that is expected to end with a limited rise in the cost of credit of 25 basis points. The European Central Bank (ECB) and the Bank of England (BoE) will announce their decisions on Thursday and a rate hike of 50 basis points is expected as at their previous meeting.
Beyond the immediate increase in the cost of credit, investors especially hope that central bankers will provide new indications on the future path of rates and their impact on the economy. In this regard, the monthly figures for consumer prices in the euro zone will be published on Tuesday and the US employment report for January will be presented on Friday.
“There is nervousness ahead of the crucial Fed meeting this week,” said Susannah Streeter, market analyst at Hargreaves Lansdown.
The major technology groups Apple, Amazon, Alphabet and Meta Platforms, sensitive to changes in interest rates, are also due to publish their results this week.
Meanwhile, on a macroeconomic level, the German economy contracted unexpectedly in the fourth quarter of 2022, by 0.2% compared to the previous three months, according to data published by Destatis on Monday, which reinforces the prospect of a a technical recession in Europe’s largest economy in the first quarter of 2023.
In Spain, inflation rose again at an annual rate in January, for the first time since July, with a rate of 5.8% over one year, after 5.7% in December, according to the first estimate published on Monday by INE.
VALUES IN EUROPE
In Europe, while waiting for the opening of Wall Street, the trend is driven by company news. Renault dropped 3.14% after the French automaker announced a reduction in its stake in Nissan from 43% to 15% as part of the rebalancing and restructuring of their alliance. Since the announcement in October of negotiations between the two groups, the title of the diamond firm has taken nearly 25%.
Ryanair fell 2.26% as the airline’s announcement of a modest dividend payment from the spring of 2024 took precedence over the record profit posted in the October-December period.
On the upside, Philips jumped 5.95% after the announcement of a plan to cut 6,000 jobs intended to improve the profitability of the Dutch group following the recall of respiratory devices which caused its stock market value to drop by 70%. .
Unilever advances by 0.78% after the announcement of the appointment of Hein Schumacher as chief executive from July 1, replacing Alan Jope.
RATES Bond yields in Europe are rising on fears of renewed inflationary pressures after the data from Spain. That of the ten-year German Bund, a reference for the whole of the euro zone, takes almost six basis points, to 2.30%.
In the United States, the yield on Treasuries with the same maturity advanced by three points, to 3.54%.
CHANGES
On the foreign exchange market, the euro benefited from Spanish inflation figures, gaining 0.3% to 1.09 dollars.
The US currency, on the other hand, is virtually stable (-0.1%) against a basket of benchmark currencies after hitting an eight-month high last week.
OIL
Oil prices are changing little pending the meetings of central banks, starting Tuesday, and that of OPEC +, scheduled for Wednesday.
Brent fell 0.07% to 86.6 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.25% to 79.48 dollars.
(Written by Claude Chendjou, edited by Kate Entringer)
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