New recession in sight for European stock markets

New recession in sight for European stock markets


EUROPEAN STOCK EXCHANGES ARE EXPECTED TO FALL SLIGHTLY

PARIS (Reuters) – Europe’s main stock markets are expected to fall slightly on Tuesday despite a small expected rebound on Wall Street after a three-day weekend, as recession fears and the prospect of sharp rises in rates continue to dominate the headlines. weigh on investor morale in Europe.

Index futures suggest a drop of 0.22% for the Paris CAC 40, 0.26% for the Frankfurt Dax, 0.23% for the London FTSE 100 and 0.32% for the EuroStoxx fifty.

Market sentiment continues to be influenced above all by the impact of the war in Ukraine and tensions in the energy market, which are fueling inflation and slowing down economic activity, as both the new rise in gas prices and the decline in indices European PMIs, which confirm the recessive scenario.

In Germany, industrial orders fell 1.1% in July, a sharper-than-expected drop, data released earlier in the day showed.

In such a context, the prospect of the European Central Bank (ECB) raising its rates on Thursday by 50 or even 75 basis points will obviously not encourage investors to start buying again.

In Australia, the RBA, as expected, raised its key interest rate by half a point to 2.35%, its fifth hike since May, and hinted that further hikes were possible even if its statement did not include further references to ” normalization” of monetary policy, which suggests that rates are close to the neutral level.

The rest of the day will be animated among other things by the US ISM services index, scheduled for 14:00 GMT.

VALUES TO FOLLOW:

ON WALL STREET

US stock markets are reported to be higher after the extended Labor Day weekend, which traditionally marks the end of the summer holiday period in the United States.

Futures contracts on the major New York indices currently point to a rise of 0.31% for the Dow Jones, 0.37% for the Standard & Poor’s 500 and 0.56% for the Nasdaq.

Last week ended with a drop of 2.99% for the Dow Jones, 3.29% for the S&P 500 and 4.21% for the Nasdaq, their third consecutive weekly decline.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index ended virtually unchanged (+0.02%), but the broader Topix lost 0.11%, its fifth consecutive decline.

The trend is much better oriented in China, where the Shanghai SSE Composite is up 0.97% and the CSI 300 is up 0.45% following statements by several Beijing policymakers and monetary officials suggesting that the authorities see urgent new stimulus measures, a discourse that has already materialized. in a reduction of foreign exchange reserves imposed on financial institutions.

The CSI index of the real estate sector thus rose by 2.51%.

CHANGES/FEES

The dollar lost 0.18% against other major currencies, a logical decline after the strong rise in recent weeks (+4.5% since August 11).

The euro took the opportunity to rise to $0.9953 (+0.27%) after hitting a 20-year low of $0.9876 on Monday.

The British pound remains on the right track within hours of the official appointment of Liz Truss as Prime Minister, despite the fact that her first speech focused on the promise of a tax cut, which does not bode well for public finances.

The Australian dollar fell 0.04% following the widely anticipated RBA rate hike.

SPEED

US Treasury yields rose in Asian trade, to 3.2424% for ten-year bonds and 3.4637% for two-year bonds. Both had fallen sharply on Friday after the monthly report on employment in the US, considered mixed by investors.

The German decennial takes a little more than a basic point in the first exchanges in Europe to 1.57%.

OIL

The price of Brent fell 0.63% to 95.14 dollars a barrel, erasing part of the gains made on Monday after OPEC+’s decision to cut production by 100,000 barrels a day in October, a gesture perceived as essentially symbolic. .

US light crude (West Texas Intermediate, WTI) was up 2.18% at $88.76 after the Labor Day weekend.

(Written by Marc Angrand)

#recession #sight #European #stock #markets

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