2023-07-31 06:42:43
The Frankfurt German Stock Exchange
by CORENTIN CHAPPRON
PARIS (Archyde.com) – The main European stock markets are expected to fall on Monday at the opening after disappointing Chinese activity indicators, the markets also positioning themselves for another week rich in results and monetary policy meetings.
The first indications available indicate that the Parisian CAC 40 would be stable at the opening, while the FTSE in London fell by 0.31% and the Dax in Frankfurt dropped 0.02%. The EuroStoxx 50 lost 0.16%.
The official leading indicators of Chinese activity released on Monday showed a contraction in manufacturing activity, while services activity also showed signs of weakness, approaching contraction territory.
Investors believe that the Chinese government will be forced to take major measures to revive its economy, but these are slow to materialize.
The markets are also positioning themselves cautiously ahead of a busy week, marked by the meeting of the Bank of England and the Bank of Australia, as well as the publication of inflation and GDP figures in the euro zone. Monday and new data on U.S. labor markets, due Thursday.
In addition, the results season continues: a third of the companies constituting the S&P500 must publish their figures this week, the quarterly results of Apple and Amazon.com being notably expected on Tuesday.
VALUES TO FOLLOW:
A WALL STREET
Wall Street ended in the green on Friday, with markets interpreting the strong quarterly results released so far, strong activity data and the Federal Reserve’s cautious rhetoric as hints that the US economy may be making a soft landing.
The Dow Jones Industrial Average gained 0.5%, or 176.57 points, to 35,459.29 points, the broader S&P-500 gained 44.82 points, or 0.99%, to 4,582.23 points. , and the Nasdaq Composite advanced by 266.55 points (1.90%) to 14,316.66 points.
IN ASIA
In Tokyo, Japanese indices rose, supported by calm domestic bond markets, as investors digested the implications of the Bank of Japan’s change in monetary policy on Friday. The Nikkei gained 1.26% to 33,172.22 points, while the Topix gained 1.40% to 2,322.68 points. Strong results from Toyota Tsusho pushed the stock up 10.33%, supporting the automotive sector more broadly.
The lackluster PMI data did not weigh on Chinese equities, which continue to bet on significant government stimulus. The Shanghai SSE Composite climbed 0.29%, the CSI 300 advanced 0.4% and the Hong Kong Hang Seng index gained 1.2%.
The MSCI Asia-Pacific ex-Japan index gained 1.1% in the wake of Chinese stocks and returned to a five-month high.
CHANGES
The outlook for the US and Eurozone economies diverges, with data released last week showing resilient activity in the US but slowing in Europe. The dollar was up 0.18% against a basket of benchmark currencies, with the euro remaining stable at $1.1014, while the pound sterling eroded 0.06% to $1.2858.
In Asia, the yen fell 0.31% to 141.59 yen to the dollar despite the Bank of Japan’s monetary policy decision, as investors continued to use the yen as a carry trade funding currency . The Australian dollar gained 0.44% to 0.6693 dollars.
RATE
US bond markets remain calm as investors see the receding risk of a US recession and the prospect of further rate hikes.
The ten-year Treasury yield rose 2.8 bps to 3.9968%, while the two-year rate climbed 1.5 bps to 4.9119%.
The Japanese 10-year yield remains at 0.606%, well below the new ceiling at 1.0%.
Yields in Europe rose more sharply, with the German ten-year yield gaining 4.2 bps to 2.497%, while that of the two-year rate rose 5.1 bps to 3.252%.
OIL
Oil is consolidating after five straight weeks of gains, triggered by fears over crude supply and better US economic prospects.
Brent fell 0.52% to 84.55 dollars a barrel and US light crude (West Texas Intermediate, WTI) dropped 0.36% to 80.29 dollars.
(Report Corentin Chapron, edited by Blandine Hénault)
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