A slight rebound is visible in Europe
By Claude Chenjou
PARIS (Reuters) – Europe’s main stock markets were expected to edge slightly higher on Monday ahead of year-end celebrations, but questions about interest rates and the evolution of economic conditions are expected to linger. trading in the absence of a catalyst.
Index futures offered a 0.31% gain for the CAC 40 in Paris, 0.25% for the Dax in Frankfurt, 0.29% for the FTSE 100 in London and 0.24% for the EuroStoxx 50.
Aside from the business climate in Germany, the macroeconomic agenda of the day is virtually empty in Europe as it is in the US. The rest of the week will be marked by a shortened session in the UK markets on Friday.
After other central banks, the Bank of Japan (BoJ) begins its monetary policy meeting on Monday, which could end with a change in its ultra-accommodative policy on Tuesday. Sources say the Japanese government plans to revise a 2013 joint statement with the BoJ that committed to reaching the central bank’s 2% inflation target “as soon as possible” next year.
Last week, the US Federal Reserve (FED), the European Central Bank (ECB) and the Bank of England (BoE) chose to raise interest rates by a total of 50 basis points, but pointed out that the fight against inflation is far from over. over, which pushed up bond yields and weighed on stocks.
For investors, the prospect of longer-term higher rates makes an economic downturn almost inevitable, especially as recent monthly PMI data in Europe and the US showed further contraction in activity.
ON WALL STREET
The New York Stock Exchange ended its third straight session higher on Friday as fears mounted that the U.S. Federal Reserve could push the economy into recession with continued monetary tightening aimed at fighting inflation.
The Dow Jones Industrial Average index fell 0.85% or 281.76 points to 32,920.46 points.
The broader S&P-500 lost 43.39 points, or 1.11%, to 3,852.36.
The Nasdaq Composite fell 105.11 points (0.97%) to 10,705.41.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei fell 1.05% to 27,237.64, while the broader Topix fell 0.76% to 1,935.41.
In China, the Shanghai SSE Composite lost 1.92%, and the CSI 300 lost 1.54%.
Sentiment among Chinese companies fell to its lowest level since at least January 2013 in December, with an index of 48.1 against 51.8 in November, according to a survey released by the World Economy. Monday.
CHANGES
In foreign currencies, the dollar lost 0.40% against a basket of benchmark currencies, while the Japanese currency was supported by speculation about possible flexibility in Japan’s inflation target. During the session, the Japanese currency is sold at 136 yen to 1 dollar, 135.78 dollars.
The euro, which reached a six-month peak last week at $1.0737, rose to $1.0633 (+0.48%) against the dollar on Monday.
RATE
The yield on ten-year Treasuries rose nearly three basis points to 3.51%, and the two-year, the most sensitive to changes in rates, was almost flat at 4.18%.
The yield on Japan’s 20-year bond rose four basis points to close at 1.17%, the highest since Nov. 9, while the five-year yield hit an almost eight-year high of 0.15%.
The yield on the 10-year German Bund, the benchmark for the entire eurozone, was virtually unchanged on Monday at 2.15% after gaining nearly eight basis points on Friday.
OIL
Oil prices are slightly higher after losing more than two dollars on Friday on fears of a recession after the central bank’s comments.
Brent rose by 0.48% to $79.42 per barrel, US light crude oil (West Texas Intermediate, WTI) increased by 0.48% to $74.65.
(Writing by Claude Chendjou, Editing by Bertrand Boucey and Kate Entringer)
