EUROPEAN STOCK MARKETS ARE EXPECTED ON THE RISE
by Laetitia Volga
PARIS (Archyde.com) – The major European stock markets are expected to rise on Wednesday in the wake of Wall Street and Chinese stock markets even if investors keep their eyes on the evolution of the Russian-Ukrainian conflict and on the United States Federal Reserve, which should raise its rates in the face of inflation.
Futures contracts indicate a gain of 2.12% for the CAC 40 in Paris, 2.34% for the Dax in Frankfurt and 1.5% for the FTSE in London.
In the aftermath of a session dominated by a retreat from investors to safe havens, the trend of the day promises to be more favorable to equities as Ukrainian President Volodimir Zelensky announced that discussions between Ukrainian and Russian negotiators, who will resume this Wednesday, seemed more realistic but that more time would be needed for a decision to be made.
The Fed’s announcements following the meeting of its monetary policy committee are the major monetary meeting of the week. The market widely anticipates a rise in US key rates, the first in three years, in the face of the continued rise in prices.
The monetary policy statement will be published at 6:00 p.m. GMT and will be followed half an hour later by the press conference of the president of the institution, Jerome Powell.
“Even if it’s a little lighthearted, at least there’s still optimism about Ukraine, combined with optimism about inflation and the prospect that the Fed won’t be more hawkish than which is already priced into the market,” said Sam Stovall, head of investment strategy at CFRA.
Another favorable element: Chinese Vice Premier Liu He indicated that Beijing was planning initiatives to support the economy and would announce measures favorable to the capital markets.
A WALL STREET
The New York Stock Exchange ended in sharp rebound on Tuesday after three sessions in the red, a further drop in oil prices and a lower than expected rise in producer prices (+0.8%) in February having helped to calm investors on inflation.
The Dow Jones index gained 1.82% to 33,544.34 points, the S&P-500 gained 2.14% to 4,262.49 points and the Nasdaq Composite advanced 2.92% to 12,948.62 points.
Futures currently point to a session on Wall Street up 0.6% to 1.2%.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei gained 1.64% in the wake of Wall Street, the decline in oil prices having reinforced the rise in shares.
Chinese equities rose sharply after the Deputy Prime Minister’s announcements of forthcoming capital market-friendly policy measures. The CSI 300 large cap index rose 4.32% while the Shanghai Composite index gained 3.48%.
In addition, health authorities reported 1,860 new symptomatic cases of local coronavirus contamination in mainland China, almost half the number the day before.
EXCHANGES/RATES
On the currency market, the dollar lost some ground against a basket of other currencies (-0.2%)
The euro, up for the third session in a row, gains 0.15% and is trading around 1.0967 dollars
In the bond market, the yield on ten-year US Treasury bills gained almost three basis points to 2.1938% and its German equivalent rose to 0.384% in early trading after a peak since November 2018, at 0.388%.
OIL
Oil prices are heading up slightly after losing more than 10% over the past two sessions as Russia’s invasion of Ukraine continues to dominate volatile trading.
Brent crude was up 2.32% to $102.23 a barrel, and U.S. crude (West Texas Intermediate, WTI) was up 1.67% to $98.05 a barrel.
(edited by Nicolas Delame)