The restoration must be confirmed in Europe, however the pattern stays fragile

by Claude Chendjou

PARIS (Reuters) – Europe’s main shares are set to rise once more on Monday, on the heels of the Chinese language market and Wall Avenue, which resulted in inexperienced on Friday after feedback a number of Federal Reserve officers thought of reassuring in regards to the tempo of the rally. . in rates of interest.

Financial coverage choices by the European Central Financial institution (ECB), a brand new burst of company income, the political scenario in Italy and uncertainty over the reopening of the Russian Nord Stream 1 fuel pipeline are anticipated to affect the pattern firstly of one other busy week.

In line with the primary accessible indications, the Parisian CAC 40 may acquire as much as 0.84% ​​on the opening, the Dax in Frankfurt 0.61% and the FTSE in London 0.55%. The EuroStoxx 50 ought to begin with a acquire of 0.78%.

A number of Fed officers, together with James Bullard and Christopher Waller, stated on Friday that there was no urgency to boost rates of interest by 100 foundation factors on the financial coverage assembly in late July.

Buyers worry that an acceleration of financial tightening by central banks within the face of rampant inflation will ship the world economic system into recession, as China’s gross home product (GDP) has already contracted 2.6% within the final quarter. to the affect of varied blocks on exercise.

In Europe, the Central Financial institution Governing Council’s tariff resolution can be introduced on Thursday and, though a 25 foundation level enhance in the price of credit score is extensively anticipated, uncertainties stay in regards to the anti-fragmentation instrument developed by the establishment. Earlier than that, the market will be taught on Tuesday the ultimate inflation figures for the month of June within the eurozone, with a rise of 0.8% from one month to the subsequent, whereas the annual price is predicted to characterize 8.6 %.

In Italy, calls multiplied over the weekend for Mario Draghi to rethink his resolution to step down as Council presidency and permit Italy to keep away from a brand new political disaster.

Concerning the Nord Stream 1 fuel pipeline, which provides Germany specifically and which is formally beneath upkeep till July 21, Moscow has already warned that its future will rely on Western demand and sanctions.

“If fuel flows don’t resume considerably, fuel costs in Europe will rise, prompting Germany and others to undertake fuel and energy rationing with the just about assured threat of a deep recession,” estimates Taylor Nugent, economist. of NAB.

Earnings season additionally continues with, specifically, the publication of the Financial institution of America and Goldman Sachs accounts earlier than the opening of the session on Wall Avenue and people of IBM after the shut.

VALUES TO FOLLOW:

ON WALL STREET

The New York Inventory Alternate closed on Friday, boosted by encouraging outcomes and indicators, similar to retail gross sales, which allowed the indexes to get well after a typically dangerous week.

The Dow Jones index gained 2.15% to 31,288.26 factors, the broader S&P-500 gained 1.92% to three,863.16 factors and the Nasdaq Composite 1.79% to 11,452.42 factors.

The Citigroup bond (+13.23%) was notably illustrated on Friday, main the banking compartment in its wake.

Index futures to this point counsel an open of 0.2% for the S&P and 0.4% for the Nasdaq.

IN ASIA

The Tokyo Inventory Alternate, which closed in dispersed order on Friday with the Nikkei up 0.54% and the Topix down 0.03%, closes on Monday, a public vacation in Japan on account of “Sea Day” (Umi not hello).

The MSCI index, comprised of Asian and Pacific shares (excluding Japan), misplaced 0.53% after having already misplaced 3.5% final week.

In China, the Composite SSE takes 1.35% and the CSI 300 0.83%, regardless of the extension of COVID-19 screening exams in Shanghai’s new districts from July 19-21.

CHANGES

The greenback, which hit a brand new practically 20-year excessive final week on the again of its safe-haven asset standing and expectations of rising U.S. rates of interest, dipped 0.11% on Monday in opposition to a basket of currencies. of reference.

Towards the Japanese foreign money, the greenback, which hit a 24-year excessive of 139.15 yen final week, is buying and selling at 138.27 yen on Monday.

The euro, which briefly dipped beneath par with the greenback final week, was nearly unchanged on Monday at 1.0085 (-0.03%).

TO EVALUATE

European bond yields, which ended decrease on Friday, are rebounding: the German 10-year Bund is up 1.145%, up two factors, whereas its Italian equal is up 2.5 factors to three.430%.

The yield unfold (unfold) between Italian and German bonds elevated to 234.5 factors, the best in a month, in opposition to a backdrop of political disaster on the peninsula.

U.S. Treasuries yields are largely flat with ten-year buying and selling at 2.9355% and two-year buying and selling at 3.141%, persevering with to replicate a reversal within the curves, an indication of better recession threat forward.

OIL

The oil market is buoyed by hopes of much less sustained price hikes in america and the absence of a right away signal of a rise in Saudi Arabia’s oil manufacturing, regardless of US President Joe Biden’s go to to the Center East.

Brent rose 1.47% to $102.66 a barrel and US mild crude (West Texas Intermediate, WTI) rose 1.29% to $98.85.

NO IMPORTANT ECONOMIC INDICATORS ON TODAY’S AGENDA

THE MARKET SITUATION:

BAGS

ASIAN

Indexes Final Var. Var. %YTD

spots

Nikkei-225 26788.47 +145.08 +0.54% -6.96%

Topix 1892.50 -0.63 -0.03% -5.01%

Hong Kong 20799.46 +501.74 +2.47% -11.10%

Taiwan 14719.64 +169.02 +1.16% -19.21%

Seoul 2375.25 +44.27 +1.90% -20.23%

Singapore 3119.64 +20.49 +0.66% -0.13%

Shanghai 3270.94 +42.88 +1.33% -10.13%

Sydney 6687.10 +81.50 +1.23% -10.18%

the fence in

Tokyo:

[.TFR]

WALL STREET

fence

previous one :

Indexes Final Var. Var. %YTD

spots

Dow Jones 31,288.26 +658.09 +2.15% -13.90%

S&P-500 3863.16 +72.78 +1.92% -18.95%

Nasdaq 11452.42 +201.24 +1.79% -26.80%

Nasdaq 100 11983.62 +215.23 +1.83% -26.57%

Session particulars at

Wall Avenue: [.NFR]

“The Day Forward” – Replace on the

subsequent session on Wall Avenue

[DAY/US]

MARKETS

EUROPEAN

Futures on the CAC 40 and

the EuroStoxx50

The next values ​​in Paris and in

Europe: [WATCH/LFR]

the session

previous one :

Closing Indices Var. Var. %YTD

spots

Eurofirst 300 1630.18 +28.24 +1.76% -13.76%

Eurostoxx 50 3477.20 +80.59 +2.37% -19.10%

CAC 40 6036.00 +120.59 +2.04% -15.62%

Dax 30 12,864.72 +345.06 +2.76% -19.01%

FTSE 7159.01 +119.20 +1.69% -3.05%

SMI 10982.09 +182.57 +1.69% -14.71%

CHANGES

Var. %YTD

Euro/Dlr 1.0091 1.0087 +0.04% -11.23%

DLR/Yen 138.20 138.53 -0.24% +20.12%

Euro/Yen 139.49 139.68 -0.14% +7.04%

Dlr/CHF 0.9760 0.9761 -0.01% +6.98%

Euro/CHF 0.9851 0.9847 +0.04% -5.00%

Stg/Dlr 1.1892 1.1852 +0.34% -12.10%

Index $ 107.9170 108.0630 -0.14% +12.21%

TO EVALUATE

Final Var. unfold/bread

(pts)

10-year bunds 1.1570 +0.0320

Bund 2 years 0.4700 +0.0160

10-year OATs 1.7830 +0.0490 +62.60

Treasury 10 2.9392 +0.0090

yr

Treasury 2 3.1431 +0.0080

yr

OIL

(in {dollars}) Earlier value Var Var.% YTD

US mild oil 98.85 97.59 +1.26 +1.29% +61.49%

Brent 102.67 101.16 +1.51 +1.49% +55.49%

(Some information could present a slight change)

(Written by Claude Chendjou, edited by Bertrand Boucey)

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