The rebound needs to be confirmed in Europe however the development stays fragile

by Claude Chendjou

PARIS (Reuters) – Main European inventory exchanges are anticipated to rise on Monday on the again of the Chinese language market and Wall Avenue, which closed inexperienced on Friday following reassuring feedback from a number of Federal Reserve officers on the tempo of rate of interest hikes.

European Central Financial institution (ECB) financial coverage selections, a brand new wave of company earnings, the political scenario in Italy and uncertainty over the reopening of the Russian Nord Stream 1 pipeline ought to affect the development firstly of one other busy week .

In keeping with the primary indications out there, the Parisian CAC 40 might achieve as much as 0.84% ​​on the opening, the Dax in Frankfurt by 0.61% and the FTSE in London by 0.55%. The EuroStoxx 50 is anticipated to begin with a achieve of 0.78%.

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

Traders concern that an acceleration of financial tightening by central banks, within the face of runaway inflation, will plunge the world financial system into recession as China’s gross home product (GDP) has already contracted by 2.6% within the yr. second quarter, due specifically to the affect of a number of blocks on enterprise.

In Europe, the choice on the speed of the Central Financial institution’s Governing Council can be recognized on Thursday and whereas a 25 foundation factors improve in the price of credit score is broadly anticipated, uncertainties stay in regards to the anti-fragmentation instrument put in place by the institute. Earlier than that, on Tuesday the market will be aware of the ultimate inflation information for the month of June within the euro zone, with an anticipated improve of 0.8% from month to month, whereas on an annual foundation the rise is anticipated to signify the 8.6%.

In Italy, over the weekend appeals to Mario Draghi multiplied to rethink his resolution to depart the presidency of the Council and permit Italy to keep away from a brand new political disaster.

As for the Nord Stream 1 pipeline, which provides Germany specifically and which is formally below upkeep till 21 July, 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 different international locations to undertake fuel and electrical energy rationing with the virtually assured threat of a deep recession,” estimates Taylor Nugent, economist of the NAB.

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

VALUES TO FOLLOW:

A WALL STREET

The New York Inventory Trade closed on Friday, pushed by encouraging outcomes and indicators, comparable to retail gross sales, which allowed indices to rebound after a typically unfavourable 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 the 1.79% to 11,452. 42 factors.

Citigroup inventory (+ 13.23%) was significantly illustrated on Friday, main the banking sector in its wake.

Index futures to this point recommend an upward opening of 0.2% for the S&P and 0.4% for the Nasdaq.

IN ASIA

The Tokyo Inventory Trade, which closed on Friday in no explicit order with the Nikkei up 0.54% and the Topix down 0.03%, closed on Monday, a public vacation in Japan as a result of “Day of the Sea” (Umi no hello).

The MSCI index, which incorporates shares from Asia and the Pacific (excluding Japan), misplaced 0.53% after already shedding 3.5% final week.

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

CHANGES

The greenback, which hit a brand new almost 20-year excessive final week, supported by its safe-haven standing and expectations of a price hike within the U.S., fell 0.11% on Monday towards a basket of currencies of reference.

Towards the Japanese foreign money, the buck, 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 fell under par with the greenback final week, remained nearly unchanged at 1.0085 (-0.03%) on Monday.

RATE IT

Bond yields rebounded in Europe, which on Friday closed decrease: that of the ten-year German Bund stood at 1.145%, up by two factors, whereas the Italian equal introduced 2.5 factors to three.430%.

The unfold between Italian and German bonds widened to 234.5 factors, the best in a month, in a context of political disaster within the peninsula.

US Treasury yields are virtually flat with the 10-year buying and selling at 2.9355% and the two-year at 3.141%, persevering with to mirror a reversal of the curves, an indication of an elevated threat of recession sooner or later, with a two-year horizon.

OIL

The oil market is buoyed by hopes for much less sustained price hikes within the US and the absence of a right away sign of elevated Saudi Arabian crude oil manufacturing regardless of US President Joe Biden’s go to to the Center East.

Brent rose 1.47% to 102.66 {dollars} a barrel and US gentle crude (West Texas Intermediate, WTI) by 1.29% to 98.85 {dollars}.

NO GREAT ECONOMIC INDICATOR ON TODAY’S AGENDA

THE MARKET SITUATION:

SCHOLARSHIPS

ASIAN

Indices Final Var. Var.% CURRENT YEAR

factors

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

Topix 1892.50 -0.63 -0.03% -5.01%

Hong Kong 20 799.46 +501.74 + 2.47% -11.10%

Taiwan 14 719.64 +169.02 + 1.16% -19.21%

Seoul 2375.25 +44.27 + 1.90% -20.23%

Singapore 3 119.64 +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 a

Tokyo:

[.TFR]

WALL STREET

Fence

ex:

Indices Final Var. Var.% CURRENT YEAR

factors

Dow Jones 31288.26 +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 al

Wall Avenue: [.NFR]

“The day earlier than” – Replace on the

subsequent session on Wall Avenue

[DAY/US]

MARKETS

EUROPEANS

Futures on the CAC 40 and past

the EuroStoxx50

The values ​​to be adopted in Paris and in

Europe: [WATCH/LFR]

The session

ex:

Closing indexes Var. Var.% CURRENT YEAR

factors

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

CURRENT YEAR% Var

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%

RATE IT

Final Var. Unfold / Sandwich

(factors)

10 yr bund 1.1570 +0.0320

Bund 2 years 0.4700 +0.0160

10 yr OAT 1.7830 +0.0490 +62.60

Treasury 10 2.9392 +0.0090

yr

Treasure 2 3.1431 +0.0080

yr

OIL

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

Gentle crude USA 98.85 97.59 +1.26 + 1.29% + 61.49%

Brent 102.67 101.16 +1.51 + 1.49% + 55.49%

(Some information might present a slight shift)

(Written by Claude Chendjou, edited by Bertrand Boucey)

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