PARIS (Reuters) – The main European stock markets are expected to fall on Monday for the first session of a week with unknown multiples, which will be dominated by the monetary policy decisions of the main world central banks.
Index futures suggest a decline of 0.48% for the CAC 40 in Paris, 0.51% for the Dax in Frankfurt, 0.25% for the FTSE 100 in London and 0.56% for the EuroStoxx 50.
The Paris market lost 0.96% last week, its first negative weekly performance after nine consecutive weeks of rebound.
If the economic agenda of the day is not very busy, the rest of the week promises to be much livelier with Tuesday the figures for consumer prices in the United States, Wednesday the decisions of the Fed then Thursday those of the Bank European Central Bank (ECB) and the Bank of England, before the publication on Friday of the first results of the PMI surveys on the activity of private companies.
Regarding the Fed, investors still very much favor the hypothesis of a rate hike limited to 50 basis points after four consecutive hikes of 75 points, counting on a slowdown in inflation in November to 6.1% on a year. But they are also awaiting new projections from the leaders of the institution and the speech of its president, Jerome Powell, on the outlook for rate changes in 2023.
The higher-than-expected producer price (PPI) figures published on Friday rekindled doubt among some, a disappointment that was somewhat mitigated by the first results of the University of Michigan’s survey of American household sentiment.
On Sunday, Janet Yellen, the United States Treasury Secretary, estimated that inflation should slow significantly in 2023.
The ECB and the BoE are also likely to opt for a half-point rate hike, but again, with no clear signs of inflation slowing, markets will be watching the outlook for the next few months. .
Thursday will also be animated by monetary policy decisions in Switzerland and Norway.
In the immediate term, markets continue to watch the development of the COVID-19 epidemic in China, where the easing of restrictions raises fears of an upsurge in infection cases.
AT WALL STREET
The New York Stock Exchange ended lower on Friday, penalized by higher than expected PPI figures, .
The Dow Jones index fell -0.9%, or 305.02 points, to 33,476.46, the Standard & Poor’s 500 lost 29.42 points (-0.74%) to 3,934.09 and the Nasdaq Composite fell 77.39 points (-0.70%) to 11,004.62.
Inflation and monetary policy questions were compounded by Lululemon Athletica’s nearly 13% drop after forecasts fell short of expectations and oil prices continued to decline
Over the whole week, the Dow lost 2.78%, the S&P 500 3.38% and the Nasdaq 3.99%.
Index futures suggest a slightly lower open for now.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index ended down 0.21% as uncertainty over US monetary policy after Friday’s indicators prompted investors to be cautious on growth stocks, drivers of the progression of last week, like Uniqlo (-0.31%) or Tokyo Electron (-0.98%).
In China, the Shanghai SSE Composite fell 0.87% and the CSI 300 1.12% as the rise in the number of COVID-19 cases regained the upper hand, in the eyes of investors, on the easing of the Beijing health policy.
CHANGES
The dollar appreciated against the other major currencies (+0.28%), supported by the figures for US producer prices and by the caution required before the maturities of the next few days.
The euro thus returned to 1.0516 dollars (-0.13%).
The yuan, which last week hit its highest level in three months against the greenback, also fell to 6.976.
The pound, for its part, pared its losses against the dollar and the euro in reaction to the announcement of an estimated growth in gross domestic product (GDP) of 0.5% in October, a figure slightly better than ‘expected.
RATE
Yields on US Treasuries are little changed in Asian trading after rising on Friday in response to producer price data.
The ten-year is displayed at 3.5598% and the two-year at 4.3419%.
OIL
Falling last week to its lowest level in nearly a year, the oil market is supported by questions about the timing of the restart of the US Keystone pipeline, closed after a major crude leak.
Brent gained 0.55% to 76.52 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.82% to 71.60 dollars.
NO MAJOR ECONOMIC INDICATOR ON THE DECEMBER 12 AGENDA
(Written by Marc Angrand, edited by Matthieu Protard and Kate Entringer)
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