(Photo credits: – L. Grassin)
(CercleFinance.com) – The Paris Stock Exchange is expected to open sharply lower on Tuesday morning, the deterioration of the situation in Ukraine following the latest Russian interventions having suddenly revived risk aversion.
Around 8:15 a.m., the futures contract on the CAC 40 index – March expiry – fell 118 points to 6666.5 points, announcing a start to the session in the red.
Caution should still weigh on the trend and limit risk-taking given the multiple geopolitical considerations that market participants must face.
Investors seem in any case to have good reasons to sell this morning following the recognition, by Vladimir Putin, of the two dissident republics of Donbass.
The Russian president has also announced his intention to send his army to “guarantee peace” in the two regions.
‘I don’t claim to be an expert on geopolitical issues, but it appears that the next step will be the implementation of the sanctions that Western countries intend to impose on Russia, as well as whether the response of the United States and the United Kingdom will be coordinated with that of the European Union”, analyzes this morning Jim Reid, strategist at Deutsche Bank.
‘Europe has a lot more to lose in economic terms and its reaction is going to be particularly interesting,’ he adds.
Unsurprisingly, oil prices are benefiting from renewed fears that tensions between Russia and the West will eventually disrupt energy supply.
The barrel of American light crude (WTI) is currently jumping almost 4% to approach 95 dollars, a new high since 2014.
The yen also benefits from its status as a safe haven, as does gold, which took 0.7% to 1913.5 dollars an ounce, a peak for almost two years.
Government bonds are also highly sought following: the yield on the German 10-year US bond begins a spectacular decline of seven points to 1.86%.
On Wall Street, the ‘futures’ on New York indices are signaling for the moment an opening on a negative note following the long weekend of ‘Washington’s Birthday’, with losses which might exceed 2% from the start of the session as far as the Nasdaq is concerned.
These elements obviously relegate to the background the economic indicators, which nevertheless promise to be rich in lessons in view of the uncertainties which currently surround the evolution of monetary policies.
After taking note, in the morning, of the Ifo index of the business climate in Germany, the operators will closely follow, this followingnoon, the PMI index of activity in the United States, then consumer confidence. of the Conference Board.