A trader in a bank in Lisbon
by Laetitia Volga
PARIS (Reuters) – Wall Street is expected to rise slightly while European stock markets regain ground on Wednesday mid-session, driven by the rebound in banking stocks after good news from Italy for the sector. American “futures” are currently signaling a gain of 0.14% for the Dow Jones, 0.22% for the Standard & Poor’s-500 and 0.23% for the Nasdaq. In Paris, the CAC 40 gained 1.26% to 7,360.89 around 10:55 GMT. In Frankfurt, the Dax takes 1.1% and in London, the FTSE 0.83%.
The pan-European FTSEurofirst 300 index rose by 0.91%, the euro zone’s EuroStoxx 50 by 1.26% and the Stoxx 600 by 0.87%.
The concern is followed by relief on the European markets regarding the taxation of Italian banks.
After announcing a tax on the windfall profits of banks thanks to the increase in interest rates by the European Central Bank – a surprise announcement which contributed to the downturn in the sector – the Italian government sent a message deemed reassuring on Tuesday in the evening by declaring that this new tax will be capped at 0.1% of the total assets of the establishments concerned.
Citi analysts had earlier estimated the contribution could be up to around 0.5% of risk-weighted assets.
In this context, the new bad statistics published in the morning in China – the first drop in consumer prices (CPI) since February 2021 and a 4.4% decline in producer prices (PPI) – have no real impact on the global trend.
JPMorgan experts even argue that signs of deflation in the world’s second-largest economy could prove good news for prices in other major economies.
“Our recent study suggests a pass-through from China to global (ex-China) inflation of around -70 basis points in the second half of the year,” they say in a note.
“As a reminder, the drop in the underlying CPI index in June in the United States had been anticipated after the significant decline in the Chinese PPI two days earlier and that of the Manheim index on the value of used vehicles”, continue the analysts.
They expect underlying US inflation to be lower than expected by the markets for the month of July. The official figures will be given Thursday by the Department of Labor and the Reuters consensus expects a monthly increase of 0.2% for the global index and the basic one. WALL STREET VALUES TO FOLLOW
VALUES IN EUROPE
In values, Italian banks like Intesa Sanpaolo, Banco BPM and UniCredit gained from 3.14% to 4.35%, while in Paris, Societe Generale took 1.91% and BNP Paribas 2.01%.
The Delivery Hero share rose 8.53% to take the lead in the Stoxx 600, the German online meal sales company has revised its annual revenue target upwards.
The retail group Ahold Delhaize dropped 1.35% on the Amsterdam Stock Exchange, analysts pointing to the decline in profitability observed in the United States in the second quarter.
RATES/EXCHANGES Variations are contained on the bond market where the ten-year Bund yield is at 2.466% and that of Treasuries at 4.0322%.
The next focus for investors will be whether the US Treasury Department is seeing strong demand for debt securities auctions, for $38 billion at ten years (Wednesday) and $23 billion at 30 years (Thursday). The dollar, penalized by the general renewed appetite for risk, lost 0.12% against the other major currencies and the euro returned to 1.0977.
OIL
On the oil side, the reduction in supply offset concerns about slowing Chinese demand and a report of rising crude inventories in the United States.
Brent gained 0.72% to 86.79 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.77% to 83.56 dollars.
NO MAJOR ECONOMIC INDICATOR EXPECTED ON THE AGENDA FOR AUGUST 9
(Laetitia Volga, edited by Blandine Hénault)