New drop in sight in Europe to start the week – 05/09/2022 at 07:53


EUROPEAN WOMEN EXPECTED DOWN AT OPENING

by Laetitia Volga

PARIS (Reuters) – The main European stock markets are expected to fall on Monday at the opening, still weighed down by concerns about global economic growth in a context of tightening monetary policies and the health crisis in China.

The first indications available indicate a decline of 1.3% for the Parisian CAC 40, 1.31% for the Dax in Frankfurt, 0.79% for the FTSE in London and 1.44% for the EuroStoxx 50 .

The week that opens will be animated in particular on Wednesday by the publication of monthly consumer price figures in the United States, which will not fail to fuel the debates on the pace of rate hikes by the Fed.

“A moderation in the CPI would be mildly comforting but an acceleration would undoubtedly revive expectations of a 75 basis point rate hike from the Fed,” analysts at ANZ Bank said.

Fears over the consequences of the Shanghai lockdown on the Chinese and global economy are growing as authorities in the country’s economic capital are expected to maintain health restrictions until the end of the month for fear of a rebound in coronavirus infections. the coronavirus, multiple sources reported.

Meanwhile, speculation that Russian President Vladimir Putin may officially declare war on Ukraine on Monday during celebrations commemorating Nazi Germany’s surrender to Allied troops is also expected to affect market sentiment.

VALUES TO FOLLOW:

AT WALL STREET

The New York Stock Exchange ended in the red on Friday, penalized by the rise in bond yields and the prospect of significant rate hikes from the Fed, reinforced by the publication of a solid employment report in the United States. [.NFR]

The Dow Jones index fell 0.3% to 32,899.37 points, the Standard & Poor’s 500 lost 0.57% to 4,123.34 points and the Nasdaq Composite fell 1.40% to 12,144.66 points. .

The S&P-500 and the Nasdaq recorded their fifth consecutive week of decline, unheard of since 2011 for the first and since 2012 for the second.

At values, sporting goods maker Under Armor plunged 23.8% after reporting a full-year profit forecast below expectations due to higher shipping costs and restrictions in China.

Futures currently suggest a decline of around 1% on Monday.

IN ASIA

In the wake of Wall Street, the Nikkei on the Tokyo Stock Exchange lost 2.4%, investors also worried about inflation and monetary tightening by the Fed.

The biggest drop went to JFE (-7.34%), the steel group having not given a financial target for the current financial year due to economic uncertainties.

In China, the Shanghai SSE Composite lost 0.16% and the CSI 300 0.96% as concerns over the economic impact of health restrictions weighed on the trend.

On the trade front, exports grew in April at their slowest pace since June 2020 (+3.9% year on year) but slightly beat expectations while imports remained stable.

RATES/EXCHANGES

Expectations of sharp rate hikes in the United States continue to weigh on the bond market where the yield on ten-year US Treasury bills gains 1.5 basis points to 3.1487% after an 18-month peak at 3.1580 %.

The dollar gained 0.4% against a basket of benchmark currencies, close to a high of nearly twenty years hit in session.

“Moves in U.S. interest rates aren’t the only support for the dollar…Downside risks to global growth from Ukraine and China are more of a concern for Europe and Asia than for the United States,” NatWest Markets strategists said in a note.

The euro thus fell to 1.0507 dollars, down 0.42%.

The yuan, for its part, fell to its lowest since November 2018 against the greenback while the confinement in Shanghai seems likely to extend until the end of the month.

OIL

The oil market is moving close to equilibrium after the leaders of the G7 countries announced on Sunday that they had agreed to impose new sanctions on Moscow, in particular by banning or phasing out their imports of Russian oil.

Brent gained 0.21% to 112.63 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.05% to 109.82 dollars.

(Written by Laetitia Volga, edited by Matthieu Protard)

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