EUROPEAN STOCK EXCHANGES EXPECTED ON THE RISE
by Laetitia Volga
PARIS (Reuters) – Major European stocks are expected to rise on Monday at the open in the wake of a rebound on Wall Street at the end of the week as concerns over U.S. monetary policy should temporarily be put aside at the start. a week full of indicators, central bank meetings and company results.
Futures contracts signal a gain of 0.93% for the Parisian CAC 40 at the opening, 1.1% for the Dax in Frankfurt, 0.65% for the FTSE in London and 1.27% for the EuroStoxx 50.
The latter fell 2.19% last week and the CAC 40 1.45%, their worst weekly performance since November mainly due to fears of an acceleration of the Federal Reserve (Fed) monetary tightening cycle and tensions geopolitics between Ukraine and Russia.
The money market assesses the probability of at least four Fed rate hikes by the end of the year at more than 90% and at 67% the probability that there will be at least five.
This week, the monetary policy meetings of the European Central Bank and the Bank of England (Thursday) will hold the attention of the market, as well as several economic indicators including inflation in the euro zone (Wednesday) and the monthly report on employment in the United States (Friday).
In the meantime, investors will take notice at 10:00 GMT of the preliminary estimate of the gross domestic product (GDP) of the euro zone in the fourth quarter and at 13:00 GMT of the first inflation figures in Germany in January.
VALUES TO FOLLOW:
AT WALL STREET
The three indices of the New York Stock Exchange ended in sharp rebound on Friday at the end of a week turbulent by the prospect of the start of a rate hike by the Fed and by mixed corporate results. [.NFR]
The Dow Jones gained 1.65% to 34,725.47 points, the S&P-500 gained 2.43% to 4,431.85 points and the Nasdaq Composite advanced 3.13% to 13,770.57 points.
This rebound allowed the S&P-500 and the Dow to post a positive weekly performance with a gain of 0.77% and 1.34% respectively, while the Nasdaq ended almost stable over the week (+0.01% ).
Apple gained 6.98% after posting record sales in the last three months of the year. The American giant has signed one of the largest increases in the Dow Jones, behind Visa (+ 10.6%), which reported a quarterly profit above expectations.
Futures contracts indicate a session without much change for the moment.
IN ASIA
In Tokyo, the Nikkei index ended up 1.07% as the major stocks in the technology compartment pulled the rating down after the rebound on Wall Street.
Mainland China, Taiwan and South Korea markets are closed due to the Lunar New Year.
On the Hong Kong Stock Exchange, which closed after half a session, the Hang Seng index rose 1.07%.
CHANGES
The dollar lost ground (-0.18%) against a basket of benchmark currencies after hitting its highest level since July 2020 in the previous session in the face of the Fed’s more restrictive posture. Since the beginning of the month, the “dollar index” has gained nearly 1.18%.
The euro rose to $1.1161 from a low of 1.1119 on Friday, its lowest level since June 2020.
RATE
On the bond market, the yield on ten-year Treasury bills rose very slightly, to 1.7892%.
In early trade in Europe, the ten-year German Bund yield takes about two basis points, to -0.026%.
In Italy, the yield on government bonds of the same maturity dropped more than six basis points to reach 1.284%, the lowest in two weeks, after the re-election of Sergio Mattarella on Saturday as President of the Republic.
“The re-election of Mattarella, with Mario Draghi as President of the Council, should in principle best guarantee the short-term continuity of government actions (…) In our view, the risk of a government crisis is low,” said ING analysts in a note.
OIL
Oil prices rose more than 1% to near seven-year highs hit Friday on supply concerns and geopolitical tensions in Ukraine and the Middle East.
The barrel of Brent advances by 1.33% to 91.23 dollars and that of American light crude by 1.21% to 87.87 dollars.
They are moving towards their strongest monthly increase in almost a year, taking for the moment around 17% for the whole of January.
(Laetitia Volga, edited by Marc Angrand and Blandine Hénault)