by Laetitia Volga
PARIS (Reuters) – Wall Street is expected to be close to balance while European stock markets rose mid-session on Monday, supported by growth in the banking sector and the prospect of a less aggressive Federal Reserve in its monetary tightening, although concerns about the economic outlook persist.
Futures contracts signal a decline of 0.06% for the Dow Jones, 0.13% for the Standard & Poor’s-500 and 0.09% for the Nasdaq.
In Paris, the CAC 40 gained 0.43% to 6,476.54 around 11:20 GMT. In Frankfurt, the Dax is up 0.48% and in London, the FTSE is up 0.5%.
The pan-European FTSEurofirst 300 index gained 0.27%, the EuroStoxx 50 in the euro zone gained 0.5% and the Stoxx 600 advanced by 0.29%.
The latter is at its highest for nearly two months, although the day’s indicators reinforce concerns about the global economy, whether it be the contraction of the PMI manufacturing index in the euro zone, the slowdown in the activity in the industrial sector in China or the drop in retail sales in Germany.
Investors are waiting at 14:00 GMT for the US manufacturing ISM and the consensus is at 52.0.
“We don’t believe the US is in a classic recession yet, but it almost certainly will be within a few quarters,” Deutsche Bank analysts said in a note.
“This lag is favorable to the markets compared to what was assessed a few weeks ago but it remains difficult to say that the outlook is positive,” they added.
This gloomy macroeconomic picture is fueling speculation about a possible slowdown in policy tightening by the Fed, which last week raised rates by three-quarters of a point.
VALUES IN EUROPE
In values, HSBC climbed 7.07% after raising a profitability target and announcing its intention to pay a quarterly dividend from next year.
Europe’s largest bank also rejected a proposal from its largest shareholder Ping An to split, arguing that the operation would be costly.
The European banking index gained 1.98%.
In Paris, Air France-KLM takes 6.33% supported by the transition to the “purchase” of HSBC and Bolloré gains 3.86% after the publication of half-year results.
Down, Heineken lost 1.02% after lowering its operating margin target for 2023 due to rising costs.
RATE
Yields on Italian government bonds are falling after Giorgia Meloni, a far-right leader tipped to succeed Mario Draghi as council president, said on Friday she would stick to Italy’s fiscal rules. European Union, thus allaying fears that Italy would distance itself from Brussels.
“Italy is one of the main beneficiaries of the European recovery plan and it would not be wise to fight with Brussels and jeopardize the flow of this money,” said Mohit Kumar at Jefferies.
The yield on ten-year BTPs fell ten basis points to 3.044%.
In Germany, the ten-year is stable at 0.832% while its American equivalent at 2.6505%.
CHANGES
In the currency market, the dollar fell to its lowest level in more than six weeks against the yen, at 131.81, as traders continued to bet that the Federal Reserve will be less aggressive in tightening its monetary policy. due to the risk of recession.
Against a benchmark basket, the greenback lost 0.41%.
The euro rose to 1.024 dollars (+0.22%).
OIL
The slowdown in manufacturing activity in China and Japan last month weighed on the oil market, heightening fears over demand.
Brent lost 1.21% to 102.71 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.67% to 96.97 dollars.
(Written by Laetitia Volga, Editing by Kate Entringer)
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