Decline in sight in Europe at the start of a busy week – 04/11/2022 at 08:12


MAJOR EUROPEAN STOCK EXCHANGES ARE EXPECTED TO DECLINE

by Marc Angrand

PARIS (Reuters) – Major European stocks are expected to fall on Monday as uncertainties over monetary policy, inflation and the conflict in Ukraine far outweigh the relative relief provided by the results of the first round of presidential elections. in France, while the price of a barrel of oil fell by more than 2%.

Index futures point to a drop of 0.87% for the Frankfurt Dax, 0.44% for the London FTSE 100 and 0.77% for the EuroStoxx 50. As for the Paris CAC 40, it could yield around 0.6% according to the first available indications.

Emmanuel Macron’s first place in Sunday’s elections was initially greeted by a strong rise in the euro in Asian markets, but this movement calmed down as the hours passed, the second round on April 24 ended up announcing much tighter than in 2017.

In addition, the week that begins, although shortened for the European and American markets since they will close on the Friday before the Easter weekend, promises to be dense in economic terms with the monetary policy meetings of the Bank of Canada on Wednesday and the Central European Bank (ECB) on Thursday, which will be preceded by consumer price figures in the United States on Tuesday.

US inflation could have reached 1.2% in March compared to February and 8.5% at an annual rate according to the Reuters consensus.

In China, official inflation statistics released on Monday show a higher-than-expected increase in producer prices of 8.3% in one year.

US banks will simultaneously begin publishing quarterly results starting Wednesday.

A WALL STREET

The New York Stock Exchange closed Friday in a mixed order, with the Dow Jones up slightly but the Nasdaq still penalized by tech stocks amid continued rising bond yields.

The Dow Jones Industrial Average gained 0.4%, or 137.55 points, to 34,721.12, but the Standard & Poor’s 500 lost 11.7 points, or 0.26%, to 4,488.51 and the Nasdaq Composite lost 186.3 points (-1.34%) to 13,711.00.

Microsoft, Tesla and Nvidia fell 1.46% to 4.49%. On the contrary, the rise in returns favored large banks such as JPMorgan Chase & Co (+1.83%), Wells Fargo (+2.09%) or Citi (+1.71%).

During the week, the S&P fell 1.26%, the Dow 0.27% and the Nasdaq 3.86%.

Futures so far point to an open lower of around 0.4% for the Dow, 0.6% for the S&P-500 and 1% for the Nasdaq.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index lost 0.84% ​​less than an hour after closing, penalized by the fall of the main technology stocks after the passage of the US Nasdaq.

In China, the Shanghai SSE Composite fell 1.87% and the CSI 300 fell 2.48%, as the health situation in the country continued to fuel fears of a sharp slowdown in growth, pending further support measures by part of the political and monetary authorities.

CHANGES

The euro initially benefited from the results of the first round of the French presidential election, rising as high as $1.0955, but then pared its gains and is now trading at 1.0881 (+0.05%).

The dollar index, which measures the fluctuations of the greenback against a reference basket, shows an advance of 0.12% but remains below 100 points, a threshold that it crossed on Friday for the first time in almost two years.

VELOCITY

The uptrend in US Treasury bond yields continues, still fueled by the prospect of a rapid tightening of US monetary policy, combining an increase in key rates and a reduction in the central bank balance sheet.

That of two-year titles, the most sensitive to interest rate expectations, took more than six basic points to 2.5818%, that of ten years more than five points to 2.7743% and that of 30 years two points to 2.7659%.

The US ten-year yield is therefore higher than its Chinese equivalent for the first time since 2010.

PETROLEUM

The oil market, which has already registered two consecutive weeks of decline, extends its losses, the trend continues to be weighed down by the use of the main consuming countries for their strategic reserves and by the large-scale confinements in China, which are slowing down demand.

Brent fell 2.28% to $100.44 a barrel and US light crude (West Texas Intermediate, WTI) fell 2.37% to $95.93.

(edited by Bertrand Boucey)

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