The main European stock markets are expected to fall sharply on Monday after the latest worrying news on the health situation in China, which adds to the nervousness of investors two days before the publication of inflation figures in June in the United States.
PARIS (Reuters) – The main European stock markets are expected to fall sharply on Monday after the latest worrying news on the health situation in China, which adds to the nervousness of investors two days before the publication of inflation figures in June in the States. -United.
Index futures suggest a decline of 1.49% for the CAC 40 in Paris, 1.36% for the Dax in Frankfurt, 1.24% for the FTSE 100 in London and 1.63% for the EuroStoxx 50.
Several major Chinese cities have announced new health restrictions up to total containment in an attempt to curb the resurgence of the COVID-19 epidemic and Shanghai is preparing for new massive testing campaigns in the coming days after the detection of a new sub-variant of the Omicron strain, the BA.5.2.1.
Macau has also closed all of its casinos for the first time in more than two years.
This information fuels fears of recession, which remain one of the main concerns of the markets, despite the higher-than-expected figure for job creations in the United States published on Friday.
This statistic, which suggests that the US labor market remains healthy, may indeed give an additional argument to the Federal Reserve to quickly tighten its monetary policy, at the risk of slowing down activity in the name of the fight against inflation. .
From this point of view, the monthly figures for consumer prices in the United States will be closely studied, as will the first results of the University of Michigan’s survey on consumer sentiment on Friday, two weeks before the next Fed meeting.
The week that is beginning will also be marked by the start of results publications in the United States, with the big banks opening the ball on Thursday and Friday. The consensus calls for a 6% year-on-year rise in Standard & Poor’s 500 earnings in the second quarter.
AT WALL STREET
The New York Stock Exchange closed in mixed order on Friday after a session marked by investor hesitation over the impact that the better-than-expected job creation figure could have on the Reserve’s monetary tightening strategy. federal.
The Dow Jones index fell 0.15%, or 46.4 points, to 31,338.15 and the Standard & Poor’s 500 fell 3.24 points, or 0.08%, to 3,899.38 but the Nasdaq Composite gained 13.96 points (+0.12%) to 11,635.31.
Over the week, the Dow rose 0.8%, the S&P-500 1.9% and the Nasdaq 4.6%.
On the value side, the results of Levi Strauss were welcomed (+ 1.03%) while Twitter fell by 4.85% after the first information from the Washington Post according to which the plan to take over the social network by Elon Musk was “seriously threatened “.
Index futures suggest a lower open for now.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index ended up 1.11% after reaching its highest level in a month in session, supported by the large victory of the Liberal Democratic Party in Sunday’s elections, which reinforces the parliamentary majority.
In China, the Shanghai SSE Composite fell 1.59% and the CSI 300 1.96%, while in Hong Kong, the Hang Seng fell 3.15%.
EXCHANGES/RATES
The dollar, supported by fears for global growth, is once again up sharply against other major currencies (+0.38%). It thus hit a new 24-year high against the yen, with the strengthening of the parliamentary majority in Tokyo being perceived as the promise of maintaining a very accommodating monetary policy.
The euro fell 0.42% against the greenback at 1.014 but held above the nearly 20-year low hit Friday at 1.007.
RATE
The yield on 10-year US Treasuries fell to 3.071% after the sharp rise triggered on Friday by US employment data, which supported the hypothesis of a three-quarter point hike in the “fed funds” rate. ” at the end of the month.
Its German equivalent fell 2.5 basis points in the very first exchanges to 1.312%.
OIL
Oil prices amplify their decline and erase most of their gains from Friday, as recession fears and health restrictions in China once again outweighed supply tensions.
Brent fell 1.18% to 105.76 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.47% to 103.25 dollars.
They had both gained more than 2% on Friday.
NO MAJOR ECONOMIC INDICATOR ON THE JULY 11 AGENDA
(Written by Marc Angrand)
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