The Frankfurt Stock Exchange, Germany
PARIS (Reuters) – The main European stock markets are expected to rise on Monday at the opening, before several major macroeconomic meetings in the week, but the uncertainties linked to monetary policy and the American debt ceiling should limit the variations.
Futures contracts suggest an increase of 0.36% for the Paris CAC 40, 0.31% for the Dax in Frankfurt, 0.41% for the FTSE in London and 0.44% for the EuroStoxx 50.
Europe’s Stoxx 600 index climbed 0.04% last week as Wall Street posted another weekly loss. Concerns about Chinese growth, the rise in Federal Reserve rates, US regional banks and even the deadlock in Washington over the raising of the debt ceiling are all reasons for concern for the markets.
China’s monthly industrial production and retail sales figures, due on Tuesday, will be particularly watched as investors grow increasingly concerned about the lackluster post-COVID recovery.
The interventions of many Federal Reserve officials during the week, including its chairman Jerome Powell on Friday, are also on the program.
Recent price data has given markets confidence that the Fed will cut rates by the end of the year, but Fed Governor Michelle Bowman warned on Friday that the central bank will likely still have to raise them if inflation remains high.
VALUES TO FOLLOW:
AT WALL STREET
The New York Stock Exchange ended slightly lower on Friday, as tech stocks fell after their recent rally, as a survey showed a sharp deterioration in consumer sentiment.
The Dow Jones index fell 0.03%, or 8.89 points, to 33,300.62 points, the S&P-500 lost 6.54 points, or 0.16%, to 4,124.08 points and the Nasdaq Composite fell 43.76 points (-0.35%) to 12,284.743 points.
The University of Michigan’s confidence index fell to its lowest level in six months, as American consumers feared that the disagreement between Republicans and Democrats over raising the federal government’s debt ceiling could trigger a recession.
The survey also showed that consumer expectations for inflation five years ahead rose to their highest level since 2011.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei (+0.81) exceeded the 29,500 point threshold for the first time since November 2021, thanks to the decline in the yen and the publication of solid corporate results.
Cosmetics maker Shiseido, which beat the consensus by posting a 97% jump in net profit on January-March, climbed 5.2% and brewer Asahi gained 3.36% after quadrupling its net profit on the period.
In China, the trend is also positive: the CSI 300 index advanced by 1.3% and the SSE Composite of Shanghai by 0.88%.
CHANGES
The dollar was virtually unchanged against a basket of benchmark currencies (-0.07%), not far from the one-month high hit earlier. The euro rose 0.15% to $1.0864.
The Turkish lira fell to its lowest level in two months as a second round of the presidential election looms in Turkey, neither of the two main candidates, incumbent President Recep Tayyip Erdogan and his rival Kemal Kiliçdaroglu, having garnered 50% of the votes.
“It’s a big disappointment for investors who were hoping for a victory for opposition candidate Kemal Kiliçdaroglu and the return to orthodox economic policy he had promised,” said Hasnain Malik, head of research at Tellimer.
RATE
On the bond market, the American ten-year gained two basis points at 3.4831% and the two-year was stable at 4%.
In Europe, the ten-year German Bund yield rose to 2.309% after closing Friday at 2.266%.
OIL
Oil prices are down slightly, due to concerns about demand from the two main consuming countries, the United States and China.
“With China’s uneven recovery and fears of slowing US growth as the debt ceiling deadline nears, all topped off by a rising dollar, market sentiment towards the crude will remain subdued at best,” said IG analyst Tony Sycamore.
Brent fell 0.15% to 74.06 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.1% to 69.97 dollars.
(Laetitia Volga, edited by Blandine Hénault)