by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected to rise again on Monday in the wake of the Chinese market and Wall Street, which ended in the green on Friday after comments deemed reassuring by several Federal Reserve officials on the pace of the rise in interest rates.
Monetary policy decisions by the European Central Bank (ECB), a fresh burst of corporate earnings, the political situation in Italy and uncertainty over the reopening of the Russian Nord Stream 1 gas pipeline are expected to influence the trend at the start another busy week.
According to the first indications available, the Parisian CAC 40 could gain up to 0.84% at the opening, the Dax in Frankfurt 0.61% and the FTSE in London 0.55%. The EuroStoxx 50 should start with a gain of 0.78%.
Several Fed officials, including James Bullard and Christopher Waller, said on Friday that there was no urgency to raise interest rates by 100 basis points at the monetary policy meeting in late July.
Investors fear that an acceleration of monetary tightening by central banks, in the face of galloping inflation, will plunge the world economy into recession as China’s gross domestic product (GDP) has already contracted by 2.6% in the past. second quarter, due in particular to the impact of multiple lockdowns on activity.
In Europe, the rate decision of the Governing Council of the Central Bank will be known on Thursday and while a rise in the cost of credit of 25 basis points is widely anticipated, uncertainties remain on the anti-fragmentation instrument prepared by the institution. Before that, the market will take note on Tuesday of the final inflation figures for the month of June in the euro zone, an increase of 0.8% being expected from one month to another, while at an annual rate the increase should represent 8.6%.
In Italy, calls multiplied over the weekend for Mario Draghi to reconsider his decision to leave the presidency of the Council and allow Italy to avoid a new political crisis.
Regarding the Nord Stream 1 gas pipeline, which supplies Germany in particular and which is officially under maintenance until July 21, Moscow has already warned that its future will depend on demand and Western sanctions.
“If gas flows do not resume significantly, gas prices in Europe will rise, prompting Germany and others to adopt gas and power rationing with the almost guaranteed risk of a deep recession. “, estimates Taylor Nugent, economist at the NAB.
The earnings season is also continuing with, in particular, the publication of the accounts of Bank of America and Goldman Sachs before the opening of the session on Wall Street and those of IBM after the close.
VALUES TO FOLLOW:
AT WALL STREET
The New York Stock Exchange ended up on Friday, driven by encouraging results and indicators, such as retail sales, which allowed the indices to rebound after a generally poor week.
The Dow Jones index gained 2.15% to 31,288.26 points, the broader S&P-500 gained 1.92% to 3,863.16 points and the Nasdaq Composite 1.79% to 11,452.42 points.
The title Citigroup (+ 13.23%) was particularly illustrated Friday, taking in its wake the banking compartment.
Index futures so far suggest an open up 0.2% for the S&P and 0.4% for the Nasdaq.
IN ASIA
The Tokyo Stock Exchange, which ended in scattered order on Friday with the Nikkei up 0.54% and the Topix down 0.03%, is closed on Monday, a public holiday in Japan due to “Sea Day”. (Umi no hi).
The MSCI index comprising stocks from Asia and the Pacific (excluding Japan) lost 0.53% after having already lost 3.5% last week.
In China, the SSE Composite takes 1.35% and the CSI 300 0.83% despite the extension of COVID-19 screening tests in new districts of Shanghai from July 19 to 21.
CHANGES
The dollar, which hit a new high of almost 20 years last week, supported by its status as a safe haven asset and expectations of a rate hike in the United States, gave up 0.11% on Monday against a basket of reference currencies.
Against the Japanese currency, the greenback, which touched a 24-year high of 139.15 yen last week, is trading at 138.27 yen on Monday.
The euro, which fell briefly below parity with the dollar last week, was almost unchanged on Monday at 1.0085 (-0.03%).
RATE
Bond yields in Europe, which ended in decline on Friday, are rebounding: that of the ten-year German Bund appears at 1.145%, up two points, while its Italian equivalent takes 2.5 points to 3.430%.
The yield spread (spread) between Italian and German bonds widened to 234.5 points, the highest in a month, against a backdrop of political crisis in the peninsula.
Yields on US Treasuries are nearly flat with ten-years trading at 2.9355% and two-years at 3.141%, continuing to reflect an inversion in the curves, a sign of heightened risk of recession in the future. a two-year horizon.
OIL
The oil market is buoyed by hopes of less sustained interest rate hikes in the United States and the absence of an immediate sign of an increase in Saudi Arabia’s crude production despite the visit of the American president Joe Biden in the Middle East.
Brent rose 1.47% to 102.66 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.29% to 98.85 dollars.
NO MAJOR ECONOMIC INDICATOR ON TODAY’S AGENDA
THE MARKET SITUATION:
SCHOLARSHIPS
ASIAN
Indices Last Var. Var. %YTD
points
Nikkei-225 26788.47 +145.08 +0.54% -6.96%
Topix 1892.50 -0.63 -0.03% -5.01%
Hong Kong 20799.46 +501.74 +2.47% -11.10%
Taiwan 14719.64 +169.02 +1.16% -19.21%
Seoul 2375.25 +44.27 +1.90% -20.23%
Singapore 3119.64 +20.49 +0.66% -0.13%
Shanghai 3270.94 +42.88 +1.33% -10.13%
Sydney 6687.10 +81.50 +1.23% -10.18%
The fence at
Tokyo:
[.TFR]
WALL STREET
Fence
former :
Indices Last Var. Var. %YTD
points
Dow Jones 31288.26 +658.09 +2.15% -13.90%
S&P-500 3863.16 +72.78 +1.92% -18.95%
Nasdaq 11452.42 +201.24 +1.79% -26.80%
Nasdaq 100 11983.62 +215.23 +1.83% -26.57%
Details of the session at
Wall Street: [.NFR]
“The Day Ahead” – Update on the
next session on Wall Street
[DAY/US]
MARKETS
EUROPEANS
Futures on the CAC 40 and on
the EuroStoxx50
The values to follow in Paris and in
Europe: [WATCH/LFR]
The session
former :
Closing Indices Var. Var. %YTD
points
Eurofirst 300 1630.18 +28.24 +1.76% -13.76%
Eurostoxx 50 3477.20 +80.59 +2.37% -19.10%
CAC 40 6036.00 +120.59 +2.04% -15.62%
Dax 30 12,864.72 +345.06 +2.76% -19.01%
FTSE 7159.01 +119.20 +1.69% -3.05%
SMI 10982.09 +182.57 +1.69% -14.71%
CHANGES
Var. %YTD
Euro/Dlr 1.0091 1.0087 +0.04% -11.23%
DLR/Yen 138.20 138.53 -0.24% +20.12%
Euro/Yen 139.49 139.68 -0.14% +7.04%
Dlr/CHF 0.9760 0.9761 -0.01% +6.98%
Euro/CHF 0.9851 0.9847 +0.04% -5.00%
Stg/Dlr 1.1892 1.1852 +0.34% -12.10%
Index $ 107.9170 108.0630 -0.14% +12.21%
RATE
Last Var. Spread/Bun
(pts)
10-year bunds 1.1570 +0.0320
Bund 2 years 0.4700 +0.0160
10-year OATs 1.7830 +0.0490 +62.60
Treasury 10 2.9392 +0.0090
year
Treasury 2 3.1431 +0.0080
year
OIL
(in dollars) Previous Price Var Var.% YTD
US light crude 98.85 97.59 +1.26 +1.29% +61.49%
Brent 102.67 101.16 +1.51 +1.49% +55.49%
(Some data may show a slight shift)
(Written by Claude Chendjou, edited by Bertrand Boucey)