Withdrawal in sight in Europe pending Lagarde’s speech – 06/28/2022 at 07:25

Withdrawal in sight in Europe pending Lagarde's speech - 06/28/2022 at 07:25
EUROPEAN STOCK EXCHANGES EXPECTED TO FALL

EUROPEAN STOCK EXCHANGES EXPECTED TO FALL

PARIS (Reuters) – The main European stock markets are expected to fall on Tuesday after the negative close on Wall Street at the end of a volatile session, reflecting the nervousness of investors awaiting news likely to guide the trend for the long term.

Index futures suggest a decline of 0.31% for the Dax in Frankfurt, 0.08% for the FTSE 100 in London and 0.4% for the EuroStoxx 50. As for the CAC 40 in Paris, it could yield around 0.4% according to the first indications available.

As the end of June approaches, many major stock market indices are heading for a second consecutive quarterly decline, which would be a first since 2016 for the CAC 40 as for the broad European Stoxx 600 index and since 2015 for Wall Street.

This poor performance is obviously explained by the inflationary context, the impact of the war in Ukraine and the general and rapid rise in interest rates, all factors which will still dominate in the coming days.

While awaiting the first inflation figures for June in Germany (Thursday) and in the euro zone as a whole (Friday), the day which is beginning will thus be animated by the debates on monetary policy with, at 08:00 GMT, the speech of Christine Lagarde, President of the European Central Bank (ECB), opening the ECB Annual Forum in Sintra, Portugal.

Federal Reserve Chairman Jerome Powell is due to speak on Wednesday in the same setting.

Investors will also watch the US Consumer Confidence Index at 1400 GMT.

AT WALL STREET

The New York Stock Exchange ended lower on Monday, with no catalyst to extend the strong rebound of the previous week as concerns over inflation and the Federal Reserve’s monetary policy tightening failed. faded away.

The Dow Jones index fell 0.2%, or 62.42 points, to 31,438.26, the Standard & Poor’ 500 lost 11.63 points, or 0.30%, to 3,900.11 and the Nasdaq Composite fell 96.06 points (-0.83%) to 11,511.57.

Sensitive to the evolution of interest rates, the digital giants, which fueled the rebound last week, this time weighed on the image trend of Amazon (-2.78%), Microsoft ( -1.05%) or Alphabet (-1.82%).

The rise in oil prices, on the other hand, benefited the energy sector, in which Exxon Mobil (+2.45%) and Chevron (+1.93%).

Futures on major indices suggest a slightly lower open for now.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index gained 0.28% to 26,945.93 points less than an hour from the close, but the trend is uncertain: the Nikkei successively crossed 27,000 points for the first time since the 13 June then swung into the red with the drop in the semiconductor sector before returning to positive territory.

In China, the Shanghai SSE Composite lost 0.06% and the CSI 300 0.09%.

CHANGES

The spreads are very small on the currency market, with currency traders playing it safe while waiting for the major events of the week, starting with Christine Lagarde’s speech in Sintra.

The euro, at 1.0574 dollars, is down slightly after briefly exceeding 1.06 in session on Monday.

The greenback is stable against a benchmark basket.

RATE

U.S. Treasury yields rose on Monday after mixed two- and five-year auction results trumped better-than-expected U.S. durable goods orders and home sales pledges in may.

The ten-year took seven basis points on the day to 3.194% and the two-year almost as much to 3.126%.

OIL

The oil market is continuing the rebound that began on Monday after statements stressing that Saudi Arabia and the United Arab Emirates, two of the main producers of crude oil, cannot significantly increase their pumping in the absence of excess capacity available.

Brent gained 1.31% to 116.60 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.18% to 110.86 dollars.

(Written by Marc Angrand)

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