PARIS (Reuters) – The main European stock markets are trading slightly on Monday morning before the publication of the PMI indices and after a week of euphoria on the stock markets marked by a sharp drop in bond yields.
In Paris, the CAC 40 rose 0.12% to 7,055.83 points around 07:20 GMT. In London, the FTSE 100 gained 0.01% and in Frankfurt, the Dax gained 0.06%.
The EuroStoxx 50 index increased by 0.17%, the FTSEurofirst 300 by 0.08% and the Stoxx 600 by 0.13%.
Futures contracts on Wall Street forecast an increase of 0.16% for the Dow Jones, 0.12% for the Standard & Poor’s 500 and 0.08% for the Nasdaq after a session in the green on Friday, notably sustained by a jump in the real estate sector against a backdrop of falling rates.
The latest economic indicators, including the US employment report, have reinforced the markets’ conviction that the interest rates of the major central banks have now reached their peaks.
According to FedWatch, the probability that the Fed will no longer raise its rates in the current tightening cycle is 90% and that of a reduction in the cost of credit from June is 86%.
Futures contracts in Europe show with a probability of around 80% that the European Central Bank (ECB) is expected to cut rates by April, while a similar move is expected from August onwards from the Bank of England (BoE).
At least nine officials from the American Federal Reserve (Fed), including its president Jerome Powell, are due to speak this week. Interventions from members of the ECB and the BoE are also expected.
On the bond market, the yield on the ten-year German Bund, which fell by 18 points last week, its largest weekly fall since June 2, recovered on Monday by around 4.5 basis points, to 2.682%. Bond yields in the euro zone nevertheless remain at a low since mid-September.
In terms of today’s economic indicators, investors are awaiting the final figures for the composite PMI indices in the euro zone which should confirm a contraction in activity in October, reflecting the impact of ECB tightening.
In terms of values, Ryanair jumped 5.1% after announcing that it anticipated a record annual profit and having committed to paying shareholders a regular dividend. The European transport and leisure compartment gained 1.2%, while Air France-KLM gained 2.36%, Easyjet 3.32% and IAG 1.26%.
Telecom Italia shares are suspended in Milan, the operator having announced on Sunday that its board of directors had approved the offer from the American fund KKR for the purchase of its fixed telephone network. Its main shareholder, Vivendi (+0.2%) considers this decision illegal.
On the SBF 120, Orpea fell 1.67%, the nursing home group having on Monday reduced its 2023 Ebitdar forecast to the bottom of the range of 705 to 750 million euros indicated in July.
(Writing by Claude Chendjou, edited by Kate Entringer)
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