Rise in sight in Europe, rates remain the No. 1 issue – 09/12/2022 at 07:50

Rise in sight in Europe, rates remain the No. 1 issue - 09/12/2022 at 07:50
The Euronext logo is visible on a building in the La Défense district of Paris

The Euronext logo is visible on a building in the La Défense district of Paris

PARIS (Reuters) – The main European stock markets are expected to rise on Monday in the wake of Wall Street and Tokyo, for a session that promises to be calm on the eve of inflation figures in the United States, the need for strong news interest rate hikes remain the main concern in the markets.

Futures contracts on indices suggest an increase of 0.66% for the Dax in Frankfurt, 0.2% for the FTSE 100 in London and 0.59% for the EuroStoxx 50. As for the CAC 40 in Paris, it could take around 0.5% according to the first indications available.

The economic agenda of the day is almost empty, with the exception of the figures for British industrial production. But the main economic event of the week will be the publication on Tuesday of the monthly consumer price figures (CPI) in the United States, expected to rise by 8.1% over one year in August after +8.5% in July.

These statistics will be followed all the more closely as they will take place a week before the meeting of the Federal Open Market Committee (FOMC) of the Federal Reserve, several members of which do not hide their desire to continue the rapid rise in the cost of credit.

On Friday, one of the US central bank’s governors, Christopher Waller, came out in favor of a “significant” rate hike, and St. Louis branch chairman James Bullard argued in favor. by a three-quarter point increase.

“These leaders have made clear the need for the FOMC to continue to raise interest rates until they have clear evidence of slowing inflation,” said Commonwealth strategist Joseph Capurso in a note. Bank of Australia.

The assumption of a 75 basis point hike on September 21 is now considered likely at 91% according to the CBOE’s FedWatch barometer.

In the euro zone, after the three-quarter point rate hike announced on Thursday, several officials from the European Central Bank (ECB) also took advantage of the weekend to continue to plead in favor of a further marked tightening in the month next.

The President of the Bundesbank, Joachim Nagel, notably declared on a German radio that if the curve of inflation does not begin to bend, “new clear measures will have to follow”.

AT WALL STREET

The New York Stock Exchange ended sharply higher on Friday, driven by technology and growth stocks, which benefited from renewed investor confidence after the decline of recent weeks.

The Dow Jones Index gained 1.19%, or 377.19 points, to 32,151.71, the Standard & Poor’s 500 gained 61.23 points, or 1.53%, to 4,067.41 and the Nasdaq Composite rose. advanced by 250.18 points (+ 2.11%) to 12,112.31.

Over the week, the S&P-500 rose 3.65%, the Dow Jones 2.66% and the Nasdaq 4.14%, their first weekly increase since mid-August.

Index futures suggest an open close to breakeven.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index gained 1.06% less than an hour from closing in the wake of Wall Street on Friday, driven by large caps such as Fast Retailing (+ 1.95%) or Tokyo Electron (+1.12%).

The values ​​of air transport and tourism are also benefiting from information according to which the government plans to soon lift the quotas on arrivals of foreign visitors to Japan.

In China, markets are closed for the Moon Festival, also known as the Mid-Autumn Festival.

CHANGES

The euro is taking full advantage of declarations over the weekend by ECB officials in favor of another sharp rise in interest rates: at 1.0084 dollars, it gains 0.45% after rising to 1.0130 , its highest level since August 18.

The dollar meanwhile posted a decline of 0.24% against a basket of benchmark currencies pending US inflation figures.

RATE

Yields on US Treasuries vary little in Asia, at 3.3328% for ten-year bonds and 3.561% for two-year bonds.

On Friday, the latter reached its highest level in more than 14 years at 3.575% in session after statements by Fed officials.

OIL

The oil market fell again after Friday’s rise of around 4%, with health restrictions in China and the prospect of continued interest rate hikes serving as pretexts for profit taking.

Brent fell 1.5% to 91.45 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.71% to 85.31 dollars.

(Written by Marc Angrand, with Kevin Buckland in Tokyo)

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