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PARIS (Archyde.com) – The main European stock markets are expected to rise cautiously on Monday and could regain a small part of the ground lost last week, before the meetings of several of the main central banks of the planet, led by the American Federal Reserve.
Futures contracts on indices suggest an increase of 0.44% for the Dax Frankfurt and 0.34% for the EuroStoxx 50. As for the CAC 40 Paris, it could take around 0.3% according to the first indications available.
British markets will remain closed, the day being a holiday in the United Kingdom on the occasion of the funeral of Queen Elizabeth II.
The broad European Stoxx 600 index lost 2.89% last week, its worst weekly performance since mid-June, and the Paris market fell 2.17% on fears of higher interest rates. and the economic slowdown increasingly weigh on the results of listed companies.
The Fed is expected to announce another sharp rate hike on Wednesday in an attempt to rein in inflation, which still shows no signs of lasting slowdown. The market is currently pricing in an 81% probability of a three-quarters-point hike in the Fed Funds rate on Wednesday, versus 19% for a 100-basis-point tightening, according to the FedWatch barometer.
After the decision of the US central bank, the markets will follow the meetings of the Japanese, Swiss and British central banks on Thursday.
The Bank of Japan is expected to leave its monetary policy unchanged as economists and analysts polled by Archyde.com expect a rate hike of 75 basis points for both the Swiss National Bank and the Bank of England.
However, this synchronized tightening is taking place in a context of deteriorating economic conditions, which is increasing the nervousness of investors.
They will also learn on Friday of the first results of the S&P Global PMI surveys on the evolution of activity in industry and services since the beginning of the month.
A WALL STREET
The New York Stock Exchange ended lower on Friday, the cancellation by FedEx of its annual financial forecasts having cooled the ardor of investors already concerned about the pace of the rise in Federal Reserve rates.
The Dow Jones index lost 0.45%, or 139.4 points, to 30,822.42, the Standard & Poor’s 500 lost 28.02 points, or 0.72%, to 3,873.33 and the Nasdaq Composite fell 103.95 points (-0.90%) 11,448.40.
All three thus returned to levels they had not known since mid-July.
FedEx , plunged 21.40% after it canceled its annual financial forecast on Thursday by saying that the results of the first quarter of its delayed financial year had suffered from the weakness of its activity volumes, which even worsened at the end of period.
In its wake, rivals UPS and XPO Logistics fell 4.48% and 4.67% respectively.
Over the week, the Dow Jones lost 4.14%, the S&P 500 4.77% and the Nasdaq 5.48%.
IN ASIA
The financial markets are also closed in Japan on the occasion of a public holiday dedicated to the respect of the elderly.
In China, the Shanghai SSE Composite fell 0.17% but the CSI 300 rose 0.11%, while in Hong Kong, the Hang Seng lost 0.89%, weakened by the decline in Wall Street and by the comments by US President Joe Biden on US support for Taiwan in the event of a Chinese invasion.
CHANGES
The dollar, which fell at the start of the day, rose again against the other major currencies (+0.11%), with the approach of Fed decisions discouraging risk taking. The greenback is trading around 0.8% below the 20-plus-year high reached on September 7.
The euro fell (-0.25%) to 0.999.
RATE
Yields on US Treasury bills ended lower on Friday, 3.438% for ten-year bonds and 3.848% for two-year bills, as the economic slowdown reflected by FedEx’s warning was deemed likely to favor the slowdown in prices, therefore make the Fed’s job easier.
PTROLE
The oil market is regaining ground, taking advantage of the pause in the rise of the dollar and the easing of health restrictions in Chengdu, China, which could support demand.
Brent gained 0.58% to 91.88 dollars a barrel and American light crude (West Texas Intermediate, WTI) 0.41% to 85.46 dollars.
(Rdig par Marc Angrand)