indices devises

PARIS (Archyde.com) – Major European stock markets fell in early trading on Monday as concerns regarding inflation and interest rate speculation continued to urge investors to be cautious.

In Paris, the CAC 40 lost 1.2% to 6,417.78 points around 07:45 GMT. In London, the FTSE 100 lost 0.4% and in Frankfurt, the Dax dropped 1.36%.

The EuroStoxx 50 index is down 1.25%, the FTSEurofirst 300 0.5% and the Stoxx 600 0.77%.

The latter has already fallen by 0.8% over the whole of last week and the CAC 40 by 0.89%.

Investors should avoid risk-taking until Friday and the speech that Jerome Powell, the chairman of the Federal Reserve, is to deliver at the traditional seminar in Jackson Hole.

In the meantime, the markets will watch the “flash” PMI indices on Tuesday, which might confirm the risk of recession in the euro zone, then on Thursday the minutes of the July meeting of the European Central Bank.

The latter is all the more expected as several ECB officials have stressed in recent days the need to continue tightening monetary policy. The latest, Joachim Nagel, President of the Bundesbank, thus judged in an interview published on Saturday that the probability of inflation exceeding forecasts was increasing.

The decline in equities is also explained by a further decline in oil prices in the face of fears of deterioration in global demand: the price of a barrel of Brent fell 1.26% to 95.50 dollars and the Stoxx index of oil and gas yields 0.87%.

More broadly, cyclical stocks are struggling: the automotive sector fell by 2.14%, that of banks by 1.41% and that of industry by 1.3%.

In Paris, ArcelorMittal drops 2.78%, the biggest drop in the CAC 40, while Renault loses 2.58% and Societe Generale 2.62%. The only two increases in the index are for Engie (+1.42%) and Sanofi, which picked up 1.05% following a fall of 16.3% over the last two weeks.

(Writing by Marc Angrand, editing by Kate Entringer)

PARIS (Archyde.com) – The main European stock markets are expected to fall on Monday at the opening while the dollar moves to its highest in five weeks, the debate on the rise in interest rates in the United States, the risk of recession in Europe and the economic difficulties in China continue to focus the attention of investors.

Index futures suggest a decline of 0.49% for the CAC 40 in Paris, 0.44% for the Dax in Frankfurt, 0.25% for the FTSE 100 in London and 0.4% for the EuroStoxx 50.

The latter dropped 1.23% last week while the CAC 40 lost 0.89% following a series of six consecutive weeks of increases.

The week ahead will be dominated by US Federal Reserve Chairman Jerome Powell’s intervention at the Jackson Hole symposium on Friday, which will give him the opportunity to clarify his positions on the timing and pace of rate hikes. interest rate less than a month before the next monetary policy meeting.

From the statements of other Fed officials last week, the markets mainly retained the need to continue raising rates, the first signs of a deceleration in prices still seeming too weak to justify a change of course.

“Fed stakeholders have stressed that further rate hikes are coming as the fight once morest inflation is not yet won,” summarizes Rodrigo Catril, senior currency strategist at National Australia Bank, in a note.

Markets and economists surveyed by Archyde.com in recent days continue to favor the hypothesis of a rate hike of 50 basis points in September, but the possibility of a rise of 75 points is far from being ruled out.

In China, on the contrary, it is the fall in rates that is making the news: the People’s Bank of China (PBC) has indeed lowered its prime lending rates at one and five years, a new credit support measure following those decided last week in the face of persistent difficulties in the real estate sector and the resurgence of the COVID-19 epidemic.

While awaiting Jerome Powell’s speech, investors will study the first results of the S&P Global PMI surveys on Tuesday and the minutes of the July meeting of the European Central Bank (ECB) on Thursday.

VALUES TO FOLLOW:

A WALL STREET

The New York Stock Exchange ended lower on Friday, dragged down by falling US large-cap stocks and rising US bond yields, ending four straight weeks of gains.

The Dow Jones index fell 0.86%, or 292.3 points, to 33,706.74, the Standard & Poor’s 500 lost 55.37 points, or 1.29%, to 4,228.37 and the Nasdaq Composite fell from 260.13 points (-2.01%) to 12,705.22.

Amazon (-2.86%) Apple (-1.51%) and Microsoft (-1.39%) were the main contributors to the S&P 500 decline.

Over the whole week, the latter fell by 1.21%, following four weekly increases in a row. The Dow Jones lost 0.16% over the week, the Nasdaq 2.62%.

Index futures so far suggest a decline of around 0.5%.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index ended the session down 0.47%, as major technology stocks lost ground in the wake of Wall Street amid rising bond yields: Tokyo Electron lost 1, 97%, Fanuc 1.93% and Shin-Etsu Chemical 1.07%.

In China, the Shanghai SSE Composite rose by 0.49% and the CSI 300 by 0.65% following the new rate cut by the BPC.

CHANGES

The dollar hit its highest level since July 15 once morest other major currencies before paring its gains (+0.06%).

Beyond speculation on American rates, the greenback is benefiting from the recurring difficulties of the euro: at 1.0032 dollars, the latter moved closer to parity following Russia’s announcement on Friday of the closure of the Nord Stream 1 gas pipeline from August 31 to September 2, which is likely to increase the risk of shortages in Europe.

The Chinese yuan, for its part, fell to its lowest level in almost two years following the BPC’s rate cut.

RATE

The rally in US bond yields triggered on Friday by producer price figures in Germany is barely easing: the ten-year, which gained almost 10 basis points in the last session of the week, briefly exceeded 3% for the first time since July 21 before returning to 2.974% and the two-year is displayed at 3.2635%.

On the European market, the ten-year German, which took nearly 15 points on Friday, fell only very slightly in the first trade, to 1.213%.

OIL

The oil market fell once more following three sessions of increases in a row, the fear of seeing the rise in US rates weigh on demand having regained the upper hand.

Brent fell 1.77% to 95.01 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.38% to 89.52 dollars.

NO MAJOR ECONOMIC INDICATOR ON THE AGENDA FOR AUGUST 22

(Written by Marc Angrand, edited by Matthieu Protard and Kate Entringer)

SHANGHAI, Aug 22 (Archyde.com) – China cut its prime lending rate (TPP) on Monday, adding monetary easing to those taken last week as it seeks to boost credit demand in the face of the economic downturn caused by the real estate crisis and the resurgence of the COVID-19 epidemic.

The People’s Bank of China (PBOC) has set the TPP at one year

CNYLPR1Y=CFXS at 3.65%, from 3.70% previously, while it cut 15 basis points from the five-year TPP

CNYLPR5Y=CFXS , now at 4.30%.

A Archyde.com survey last week indicated that most analysts polled were expecting a 10 basis point decline in the TPP year on year, with all expecting a reduction in the TPP over five years.

(Report Winni Zhou and Brenda Goh; French version Jean Terzian)

Indexing energy prices to household income: this is the hypothesis put forward by the Minister of the Economy, faced with the galloping increase in gas and electricity prices. The wealthiest French people might therefore pay more for their energy in 2023.

After the tariff shield, other measures to be invented

The twists and turns of the energy crisis do not end there, generating repeated increases which undermine the budget of the French. After falling during the health crisis, prices rose once more in early 2021 due to reduced European production. The coup de grace was given by the war in Ukraine and the turmoil in the Russian gas market. The tariff shield, which was to end on June 30, 2022, will finally be extended until the end of the year. The State will therefore continue to cover the difference with the market price, a measure which has enabled households to avoid an increase of around 50% for gas and 35% for electricity. But the alert level on public finances seems to have been reached, and, according to the minister, involving the oil companies in the collective effort does not seem so simple. What will happen from 2023? For gasoline, the government is considering the creation of a fuel allowance for those who must use their car to get to work. But for electricity and gas, solutions have to be found. Adjusting prices according to income is one of the avenues under consideration. From 1 January 2023, we might therefore move from a general mechanism to a more targeted mechanism, reserving increases for those who can afford them, in order to help those who need them most.

A project to be specified, and a reduction in expenses encouraged

The government is currently preparing minds on the concept of invoicing indexed to the standard of living, and the project will have to be debated in the National Assembly. The precise terms of the new law are not yet known. In any case, and whatever the decision to come, reducing energy expenditure is one of the eco-responsible actions that everyone must reinforce. Lower the heating by at least 1°, set the water heater to 60°, avoid air conditioning, switch off appliances on standby, use LED bulbs, use the “Eco” program of the washing machine and dishwasher, avoid using the dryer, check the energy label when buying household appliances, etc. The list, far from being exhaustive, is long! When possible, carrying out work is a good way to consume less, by insulating roofs, walls and windows, and by replacing your heating system with a heat pump, a biomass boiler or a wood pellet stove. Different aid can be granted to carry out this work: MaPrimeRénov’, the eco-PTZ, the TotalEnergies bonus, 5.5% VAT, etc. And, even if the bonuses no longer exist, why not install photovoltaic panels on your roof? The gesture is good for the planet, and the installation is amortized in 7 to 8 years.