POWELL CONTINUES TO LEAD EQUITIES AND BOOST THE DOLLAR
PARIS (Reuters) – Major European stocks are expected to fall sharply on Monday as market sentiment continues to be weighed down by Federal Reserve Chairman Jerome Powell’s latest remarks that herald a prolonged phase of high interest rates. to counteract inflation.
Index futures contracts suggest a drop of 1.41% for the Frankfurt Dax and 1.25% for the EuroStoxx 50. As for the Paris CAC 40, it could return around 1.1% according to the first directions available.
Markets will be closed in the UK for the “Summer Bank Holiday”.
Declaring in Jackson Hole on Friday that the Fed should continue a tightening policy for “some time” even if it means slowing growth, Jerome Powell took some of the investors, who had hoped that the first signs of improvement in the inflation front would slow the rise in interest rates.
“Powell clearly implied there was not a shift to a dovish stance as some had anticipated,” said Carol Kong, senior partner for monetary strategy and economics at the Commonwealth Bank of Australia.
Markets are now pricing in a 72.5% chance of a three-quarter point increase in the target fed funds rate after the next Fed meeting in late September, according to the Time Barometer.real FedWatch.
And the rhetoric is no more encouraging from the European Central Bank (ECB), whose various leaders spoke out this weekend in favor of a sharp rate hike next month to avoid lasting anchoring of inflation.
The week that begins will be encouraged, among other things, by the employment figures quoted in the United States and by the first inflation estimates for August in the euro zone.
VALUES TO FOLLOW:
ON WALL STREET
The New York Stock Exchange experienced one of the worst sessions in recent months on Friday after Jerome Powell’s speech, and it seems that its decline will continue.
The Dow Jones index fell 3.03%, or 1,008.38 points, to 32,283.4, the Standard & Poor’s 500 lost 141.38 points, or 3.37%, to 4,057.74 and the Nasdaq Composite it plummeted 497.56 points (-3.94%) to 12,141.71, signing its worst session since June 16.
All 11 major S&P sectors finished in the red, with high tech down 4.28% and telecommunications services down 3.87%. Among the heaviest falls of the day, Nvidia fell 9.2% and Amazon fell 4.8%.
During the week, the three main New York indices fell between 4 and 4.5%.
And futures contracts point to a sharply lower open for now, around 0.7% for the Dow and more than 1.2% for the Nasdaq.
On the Tokyo Stock Exchange, the Nikkei index lost 2.66% less than an hour after closing and touched its lowest level in a session since August 10, a drop that affects technology stocks after the Nasdaq , as well as industrial companies, although the fall in the yen limits the damage for large exporters.
In China, the Shanghai SSE Composite lost 0.24% and the CSI 300 lost 0.68%.
The dollar, up 0.61% against other major currencies, is at its highest level in 20 years, again buoyed by expectations of widening rate spreads.
The euro lost 0.44% against the dollar at 0.9917.
The yuan broke through the 6.9 per dollar threshold despite the People’s Bank of China (PBC) announcement of a rising daily central rate.
Le return des bons du Trésor américain à deux ans, particularly sensitive to anticipations d’évolution des taux, poursuit sa remontée dans les échanges en Asia et atteint son plus haut niveau depuis fin 2007 a 3.489%, en hausse de plus de neuf points essential.
The decennial, takes more than eight points to 3.1155% but remains below its peak in mid-June (3.499%).
The two to ten year portion of the yield curve thus remains clearly inverted with a spread of more than 36 basis points between the two exchanges.
On the European side, Euribor futures are falling, signaling an upward revision in the probability of a three-quarter point hike in ECB rates in September.
The oil market is supported by reports that OPEC + could cut production if necessary to support prices, a perspective that is added to the renewed violence of recent days in Libya and expectations of demand in Europe due to the rise in prices. gas prices.
Brent gained 0.88% to $101.88 a barrel and US light crude (West Texas Intermediate, WTI) 1.07% to $94.06. They gained 4.4% and 2.5% respectively last week.
THERE IS NO IMPORTANT ECONOMIC INDICATOR ON THE DAY’S AGENDA
(Written by Marc Angrand)
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