The rebound in equities continues, the rise in yields too – 06/27/2022 at 13:15

The rebound in equities continues, the rise in yields too - 06/27/2022 at 13:15
THE REBOUND IN EQUITIES CONTINUES, THE RISE IN YIELDS ALSO

THE REBOUND IN EQUITIES CONTINUES, THE RISE IN YIELDS ALSO

PARIS (Reuters) – Wall Street is expected to rise and European stock markets rose mid-session on Monday, the announcement of further easing of health restrictions in China and the drop in oil prices encouraging the continuation of the rebound that began at the end of the session. last week, between bargain shopping and renewed optimism about the global economy and inflation.

Futures contracts on the main New York indices suggest an increase of 0.18% for the Dow Jones at the opening, 0.34% for the Standard & Poor’s 500 and 0.45% for the Nasdaq.

In Paris, the CAC 40, hampered by the drop in EssilorLuxottica, only gained 0.22% to 6,086.90 points at 11:00 GMT after hitting a two-week high at 6,156.60. In London, the FTSE 100 takes 0.6% and in Frankfurt, the Dax advances by 0.91%.

The EuroStoxx 50 index is up 0.85%, the FTSEurofirst 300 0.6% and the Stoxx 600 0.67%, the highest since June 14.

The MSCI world index, which is also benefiting from the sharp rise in Asian markets (+1.43% for Tokyo, +0.88% for Shanghai), is heading for its third positive session in a row.

The announcement this weekend of the reopening of schools in Beijing and the declarations of the general secretary of the Communist Party in Shanghai on victory in the “war” against COVID-19 fuel the renewed optimism aroused last week by the decline in oil prices.

This could quickly benefit businesses and households alike and above all, it could encourage central banks to tighten their monetary policy less rapidly than anticipated in the months to come, which would reduce the risk of recession.

In the immediate future, investors are following the news from Bavaria, where the heads of state and government of the G7 were to discuss, among other things, the possibility of capping the price of a barrel of oil and that of banning imports of oil. gold.

IN WALL STREET

VALUES IN EUROPE

The strongest sectoral increase in Europe was for raw materials (+2.86%), which benefited from the rebound in the prices of base metals (+0.85% for example for copper), favored by the improvement in the health situation in China and the fall in the dollar.

ArcelorMittal gains 2.16%, Rio Tinto 3.09%, Antofagasta 3.21%.

At the top of the Stoxx 600, the Dutch Prosus jumped 18.41% after announcing a share buyback plan that it plans to finance by selling shares in Chinese Tencent, of which it owns 28.9%.

On the decline, EssilorLuxottica, Generali and Mediobanca lost 1.36%, 2.62% and 3.11% respectively after the death of Leonardo Del Vecchio, president of the optical giant and key shareholder in the investment bank.

RATE

The revision in rate expectations continues to support the rise in US Treasury yields after the two-week lows hit in the middle of last week: the ten-year is up almost six basis points at 3.1734% and the two-year-old by just over three points to 3.0873%.

The trend is the same for eurozone yields in this first session of a week which will be driven in particular by the first inflation figures for June in Germany (Thursday) and in the eurozone (Friday).

That of the ten-year German Bund, which fell by more than 25 basis points last week, recovered just over eight points to 1.553% and its French and Italian equivalents followed suit, at 2.088% and 3.661% respectively.

CHANGES

The dollar continued to decline against the other major currencies (-0.27%), a consequence of the downward revision of expectations for changes in US interest rates.

The euro thus rises to 1.0582 dollars (+0.27%) a few hours before the opening of the annual Forum of the European Central Bank (ECB) in Sintra, Portugal, during which must speak in the many of the world’s top central bankers over the next few days.

OIL

The oil market, which fell at the start of the session, went back into the green in the absence of a decision at the G7 on a possible cap in world prices, a hypothesis mentioned in recent days.

Brent gained 0.38% to 113.55 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.14% to 107.77 dollars.

The week that is starting will also be animated by the OPEC+ ministerial meeting on Thursday.

GOLD

The price of gold is up 0.57% to 1,836.5 dollars an ounce, after statements by the G7 on its desire to reduce revenues drawn by Russia from its exports of yellow metal.

(Writing by Marc Angrand, editing by Kate Entringer)

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