A trader works at the IG index
by CORENTIN CHAPRON
Wall Street is expected to fall at the opening on Monday, while the European stock markets are in decline at mid-session, the resumption of the bond sales movement putting risky assets, already penalized by international tensions, under pressure.
New York index futures suggest an opening down 0.54% for the Dow Jones, 0.55% for the Standard & Poor’s 500 and 0.65% for the Nasdaq.
In Paris, the CAC 40 declined by 0.2% to 6,802.85 points around 10:55 GMT, compared to a decline of 0.59% for the FTSE in London and 0.79% for the Dax in Frankfurt.
The pan-European FTSEurofirst 300 index lost 0.65%, compared to a drop of 0.4% for the EuroStoxx 50 and 0.65% for the Stoxx 600, which reached a seven-month low.
Yields resumed their rise on Monday after having declined at the end of last week, under pressure from robust economic activity data in the United States, which raised fears of a further tightening of rates by the American Federal Reserve.
The United States is also issuing significant amounts of debt, which is also helping to push yields up.
“Yields have exceeded their ceiling of 5%, (…) which increasingly appears to be a solid anchor point for the bond securities complex,” estimates Florian Ielpo, head of research at Lombard Odier AM.
“At these levels, however, rate volatility could remain quite high: as a result, rates could move in a range of 4.75 to 5.25% for which stocks are not yet prepared.”
The conflict in the Middle East is also weighing on risk appetite, with markets worried about a possible worsening of the conflict: last week, geopolitical tensions pushed the VIX volatility index to its highest since March .
The week will also be marked by the meeting of the European Central Bank on Thursday and by the publication of inflation in the United States on Friday, which calls for caution, because any upward surprise could complicate the Fed’s decision on the 1st. november.
In addition, many American companies will publish their results this week, including Microsoft, Alphabet, Amazon and Meta Platforms.
RATE
Yields are rising, while the signals sent by the American economy demonstrate the robustness of activity.
The ten-year Treasury yield increased by 8 bp and exceeded 5% during the session, at 5.0037%, while the two-year rose by 3.6 bp to 5.1204%.
The yield on the German ten-year rate rose by 7.3 bp to 2.955%, while that of the two-year rate increased by 3.3 bp to 3.209%.
VALUES TO FOLLOW IN WALL STREET
Chevron announced Monday that it was acquiring Hess in a $53 billion all-stock deal.
VALUES TO FOLLOW IN EUROPE
Atos lost 9.58%, at the bottom of the SBF120, with investors worried about a possible nationalization project.
Dassault Aviation gained 1.92%, at the top of the SBF120, after information from La Tribune according to which Saudi Arabia had asked the group for a costed proposal for the possible acquisition of 54 Rafale.
The Maisons du Monde listing was disrupted on Monday with the activation of several reserve mechanisms due to the high volatility of the stock. This fell by 0.38% after having jumped by more than 12% at the opening.
Volkswagen fell 2.19%, and reached its lowest level since April 2020 during the session, after the German car manufacturer reduced its operating margin outlook for the current year.
CHANGES
Currencies are moving little in a context of risk aversion and a sharp rise in bond yields.
The dollar gained 0.02% against a basket of reference currencies, the euro gained 0.09% to 1.0603 dollars and the pound sterling lost 0.04% to 1.2155 dollars.
OIL
Oil markets remain focused on the situation in the Middle East and are eroding in a context of uncertainty.
Brent declined 0.51% to $91.69 per barrel, with light American crude (West Texas Intermediate, WTI) dropping 0.69% to $87.47.
(Written by Corentin Chappron, edited by Blandine Hénault)