The rebound ought to be confirmed in Europe, however the development stays fragile – 07/18/2022, 09:56

REBOUND SHOULD BE CONFIRMED BUT THE TREND HAS BEEN BROKEN IN EUROPE

by Claude Chendjou

PARIS (Reuters) – Europe’s main inventory markets are anticipated to rise once more on Monday, after the Chinese language market and Wall Road. at rates of interest.

The European Central Financial institution’s (ECB) financial coverage selections, a brand new growth in company earnings, the political state of affairs in Italy and uncertainty over the reopening of Russia’s Nord Stream 1 gasoline pipeline are anticipated to have an effect on the development in the beginning of a busy week.

In line with the primary out there indicators, the Parisian CAC 40 may acquire as much as 0.84% ​​within the opening, 0.61% in Dax Frankfurt and as much as 0.55% within the FTSE London. EuroStoxx 50 ought to begin with a acquire of 0.78%.

A number of Fed officers, together with James Bullard and Christopher Waller, mentioned on Friday that there was no urgency to lift rates of interest by 100 foundation factors at their financial coverage assembly on the finish of July.

Buyers worry that central banks’ acceleration of financial tightening within the face of galloping inflation may plunge the world financial system into recession, as China’s gross home product (GDP) contracted by 2.6% final yr. to the impact of a number of deadlocks on exercise.

The rate of interest choice of the Central Financial institution Board of Administrators in Europe will probably be introduced on Thursday and a rise of 25 foundation factors is predicted in the price of loans, whereas uncertainties concerning the anti-fragmentation instrument ready by the establishment proceed. Earlier than that, the market will be aware the ultimate inflation figures for June within the euro space on Tuesday, with a 0.8% month-to-month enhance anticipated, with an annual price enhance of 8.6%.

In Italy, calls have multiplied over the weekend for Mario Draghi to rethink his choice to step down from the presidency of the Council and permit Italy to keep away from a brand new political disaster.

Particularly with regard to the Nord Stream 1 gasoline pipeline, which feeds Germany and is formally underneath upkeep till July 21, Moscow has already warned that its future will depend upon demand and Western sanctions.

“If gasoline flows don’t restart considerably, gasoline costs in Europe will rise, prompting Germany and others to undertake gasoline and electrical energy rationing, with the danger of a deep recession nearly assured,” NAB economist Taylor Nugent predicts.

The earnings season continues, particularly with Financial institution of America and Goldman Sachs accounts posting on Wall Road and earlier than IBM’s opening after closing.

VALUES TO FOLLOW:

A WALL STREET

The New York Inventory Trade closed on Friday amid encouraging outcomes and indicators corresponding to retail gross sales, which helped the indexes get well after a typically weak week.

The Dow Jones index was up 2.15% to 31,288.26, the broader S&P-500 was up 1.92% to three,863.16, and the Nasdaq Composite was up 1.79% to 11452.42.

The Citigroup title (+13.23%) caught consideration on Friday, particularly taking the banking division.

Index futures are opening 0.2% for the S&P and 0.4% for the Nasdaq up to now.

IN ASIA

The Tokyo Inventory Trade, which led to a messy Friday with Nikkei shedding 0.54% and Topix shedding 0.03%, is closed on Monday, a public vacation in Japan for “Sea Day”.

The MSCI index, which incorporates equities from Asia and the Pacific (excluding Japan), misplaced 0.53% after already shedding 3.5% final week.

In China, SSE Composite receives 1.35% and CSI 300 0.83% regardless of the extension of COVID-19 screening assessments within the new areas of Shanghai from July 19 to July 21.

CHANGES

The greenback, which reached a brand new excessive in practically 20 years final week, supported by its safe-haven standing and US rate of interest hike prospects, tumbled 0.11% towards a benchmark basket of currencies on Monday.

The greenback, which hit a 24-year excessive of 139.15 yen final week, is buying and selling at 138.27 yen towards the Japanese foreign money on Monday.

The euro, which briefly fell beneath the greenback parity final week, was nearly unchanged at 1.0085 (-0.03%) on Monday.

RATIO

Bond yields in Europe, which ended decrease on Friday, are choosing up: the ten-year German Bund’s is up two factors at 1.145, whereas its Italian equal is up 2.5 factors to three,430%.

The unfold between Italian and German bonds widened to 234.5 factors, a one-month excessive, on the backdrop of the political disaster within the peninsula.

Yields on U.S. Treasuries are nearly flat with a two-year horizon at 2.9355% on ten-years and three.141% on two-years, persevering with to mirror a reversal within the curves, an indication of elevated recession danger sooner or later.

LIQUID OIL

The oil market is bolstered by hopes of much less sustainable rate of interest hikes in america and by the shortage of indicators of a spike in Saudi Arabian crude oil manufacturing regardless of US president Joe Biden’s go to to the Center East.

Brent was up 1.47% to $102.66 a barrel, and US mild crude (West Texas Intermediate, WTI) was up 1.29% to $98.85.

NO GREAT ECONOMIC INDICATORS ON TODAY’S AGENDA

MARKET STATUS:

SCHOLARSHIPS

ASIA

Indices Final Exist. There’s. %YTD

level

Nikkei-225 26788.47 +145.08 +0.54% -6.96%

Topix 1892.50 -0.63 -0.03% -5.01%

Hong Kong 20799.46 +501.74 +2.47% -11.10

Taiwan 14719.64 +169.02 +1.16% -19.21%

Seoul 2375.25 +44.27 +1.90% -20.23%

Singapore 3119.64 +20.49 +0.66% -0.13%

Shanghai 3270.94 +42.88 +1.33% -10.13%

Sydney 6687.10 +81.50 +1.23% -10.18%

fence

Tokyo :

[.TFR]

WALL STREET

Fence

earlier than :

Indices Final Exist. There’s. %YTD

level

Dow Jones 31288.26 +658.09 +2.15% -13.90%

S&P-500 3863.16 +72.78 +1.92% -18.95%

Nasdaq 11452.42 +201.24 +1.79% -26.80%

Nasdaq 100 11983.62 +215.23 +1.83% -26.57%

Session particulars at

Wall Road: [.NFR]

“Subsequent Day” – Replace

The subsequent session on Wall Road

[DAY/US]

MARCHES

EUROPEAN

CAC 40 and better futures

l’EuroStoxx50

Values ​​to be noticed in and in Paris

Europe : [WATCH/LFR]

Session

earlier than :

Indices Clôture Var. It occurred. % YTD

level

Eurofirst 300 1630.18 +28.24 +1.76% -13.76%

Eurostoxx 50 3477.20 +80.59 +2.37% -19.10%

CAC 40 6036.00 +120.59 +2.04% -15.62%

Dax 30 12864.72 +345.06 +2.76% -19.01%

FTSE 7159.01 +119.20 +1.69% -3.05%

SMI 10982.09 +182.57 +1.69% -14.71%

CHANGES

There’s. %YTD

Euro/Dlr 1.0091 1.0087 +0.04% -11.23%

Dlr/Yen 138.20 138.53 -0.24% +20.12%

Euro/Yen 139.49 139.68 -0.14% +7.04%

Dlr/CHF 0.9760 0.9761 -0.01% +6.98%

Euro/CHF 0.9851 0.9847 +0.04% -5.00%

Stg/Dlr 1.1892 1.1852 +0.34% -12.10%

Index $ 107.9170 108.0630 -0.14% + 12.21%

RATIO

There’s Final. Unfold/Good

D

(level)

Package deal 10 and 1.1570 +0.0320

Pack 2 and 0.4700 +0.0160

OAT 10 and 1.7830 +0.0490 +62.60

Treasury 10 2.9392 +0.0090

ans

Treasury 2 3.1431 +0.0080

ans

PETROLEUM

(in {dollars}) Earlier Worth Sure.% YTD

US mild crude 98.85 97.59 +1.26 +1.29 +61.49%

Brent 102.67 101.16 +1.51 +1.49% +55.49%

(Some information could present a slight drift)

(Written by Claude Chendjou, edited by Bertrand Boucey)

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