Wait-and-see attitude dominates before central bank meetings – 06/07/2023 at 13:36


by Laetitia Volga

PARIS (Reuters) – Virtual stability is expected on Wall Street and European stock markets are moving in dispersed order but with small differences mid-session on Wednesday, a new Chinese indicator that is not very reassuring and the expectation of central bank meetings this week. next causing investors to stay away from equities.

On Wall Street, the “futures” on New York indices suggest an increase of 0.02% for the S&P-500, a decline of 0.06% for the Dow Jones and 0.05% for the Nasdaq. In Paris, the CAC 40 lost 0.14% to 7,198.91 at 10:53 GMT. In Frankfurt, the Dax fell by 0.11% and in London, the FTSE grabbed 0.12%.

The pan-European FTSEurofirst 300 index fell 0.03%, the Eurozone EuroStoxx 50 fell 0.14% and the Stoxx 600 was perfectly stable.

The Madrid Stock Exchange outperformed the other European markets with a gain of 0.55% for the Ibex 35 index, which benefited from the 6.16% increase of the fashion giant Inditex. The owner of the Zara and Massimo Dutti brands published quarterly net profit growth above expectations, despite rising labor costs and the closure of its stores in Russia.

The rest of Europe suffered from lower Chinese foreign trade figures for the month of May published in the morning. The decline in exports turned out to be more marked than expected, which in the eyes of many experts reflects the impact of the global economic slowdown on external demand.

“The Chinese data is the latest indicator showing that global demand is not good,” said Ben Laidler, at eToro. “There is a huge gap in the global economy between services and manufacturing. This is a warning signal that global growth will slow down. The question is to what extent.”

In its latest forecasts, the OECD sees global growth accelerating only marginally this year, due to the effects of monetary tightening by central banks.

With the absence of leading indicators in the coming days and the reserve period imposed on Federal Reserve officials and, as of Thursday, on those of the ECB before the monetary policy meeting next week, the wait-and-see attitude could dominate on the stock market for several sessions.

Markets are pricing in a status quo from the Fed and a further 25 basis point hike in ECB rates. In the meantime, the Bank of Canada will issue its monetary policy statement at 14:00 GMT. WALL STREET VALUES TO FOLLOW

VALUES IN EUROPE

The European distribution sector (+2.5%) posted the strongest increase, driven by Inditex.

The Stoxx index of basic resources (+1.3%) is also well oriented, the hope of other economic support measures in China supporting the prices of industrial metals. Copper hit a one-month high of $8,418 a tonne.

In London, Rio Tinto, Anglo American and Glencore gained 1% to 1.7%.

Vodafone rose 2.74% after a Reuters report that the group and Hutchison are in the final stages of a deal to merge their UK operations.

CHANGES

The dollar is down 0.17% against other major currencies, ahead of the Fed meeting and monthly US inflation figures next week.

The single European currency is trading around 1.0712 dollars.

Cryptocurrencies remain under pressure after lawsuits by the SEC, the watchdog of Wall Street, against Coinbase and Binance for not declaring their exchange platform in the United States.

Bitcoin, at $26,610, lost 2.3%. Binance’s BNB token drops 1.87%.

RATES Variations are limited on the side of bond yields: that of the ten-year German is stable at 2.377% and its American equivalent drops 1.5 basis points to 3.6852%.

OIL

The oil market is rising as the Saudi kingdom’s unexpected commitment to further cut its supply in July outweighs fear over developments in the global economy.

Brent gained 1.01% to 77.06 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.07% to 72.51 dollars.

NO MORE MAJOR ECONOMIC INDICATOR ON TODAY’S AGENDA

(Laetitia Volga, edited by Blandine Hénault)



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