MAJOR EUROPEAN STOCK EXCHANGES EXPECTED TO FALL
by Laetitia Volga
PARIS (Archyde.com) – Major European stock markets are expected to fall on Tuesday at the open and government bond yields continue to climb on fears of runaway inflation that could lead to further monetary tightening. scale in the United States.
Futures contracts indicate a drop of 1.4% for the Paris CAC 40, 1.41% for the Dax in Frankfurt, 0.53% for the FTSE in London and 1.36% for the EuroStoxx 50 .
The theme of inflation is essential as the publication of monthly consumer price figures in the United States approaches (12:30 GMT), a further acceleration of which could confirm the Federal Reserve in the scenario of more monetary tightening. pronounced than expected.
The Archyde.com consensus expects consumer prices in the United States to rise 8.4% year on year in March, which would represent the largest increase in the index since January 1982.
“We’re pretty hawkish in terms of US rate hikes and we think it’s not just the extent of monetary tightening but its pace that’s going to impact investors,” Elizabeth Tian told Archyde.com. head of bond management at Citigroup in Sydney.
“Equity markets have been very strong…but we expect the Fed meeting in May to result in an announcement on tapering monetary easing and that’s when- where we might see volatility emerge in equities,” she added.
In Germany, inflation harmonized with European standards (HICP) reached its highest level in more than 40 years, at 7.6% year on year in March, according to final figures published by Destatis.
A WALL STREET
The New York Stock Exchange ended lower on Monday as the continued rise in bond yields weighed on major growth stocks.
The Dow Jones index fell 1.19% to 34,308.08 points, the S&P-500 lost 1.68% to 4,412.83 points, and the Nasdaq Composite fell 2.18% to 13,411.96 points. .
Futures currently suggest a decline of 0.25% to 0.4% at the open.
IN ASIA
At the Tokyo Stock Exchange, the Nikkei fell 1.81% to a four-week low as technology stocks, heavyweights in the index, fell in the wake of the negative session on Wall Street.
Resona Asset Management chief strategist Koichi Kurose pointed out that concerns over China’s COVID-19 lockdown and rising commodity prices were also affecting the trend.
In China, the large-cap CSI 300 (+1.53%) and the Shanghai SSE (+1.2%) index turned higher, a move analysts blame on the easing of regulations video games.
RATE
On the bond market, the yield on the ten-year US government bond rose by more than four basis points to 2.8224% after hitting its highest level in session since December 2018 at 2.8360%.
Its German equivalent gained in the first exchanges nearly three basis points, to 0.833% at its highest since July 2015. Ditto for the ten-year French, which climbed to 1.348%.
CHANGES
Variations are limited on the foreign exchange market where the dollar gleans 0.22% against a basket of reference currencies for its ninth session of consecutive increases under the effect of expectations of a rate hike by the Fed.
The euro gave up some ground, around 1.0863 dollars, after being supported the day before by the results of the first round of the presidential election in France.
OIL
Oil prices rose, erasing some of the previous day’s losses, as the market weighed the possibility of sanctions against the Russian energy sector and OPEC warned that it would be unable to offset the loss of Russian crude.
Brent gained 2.97% to 101.4 dollars a barrel and American light crude (West Texas Intermediate, WTI) took 3.13% to 97.24 dollars.
On Monday, they both lost around 4% amid fears for demand with the health crisis in China.
(Laetitia Volga, edited by Bertrand Boucey and Jean-Michel Bélot)