by Laetitia Volga

PARIS (Reuters) – Wall Street is heading for a stable opening on Monday and European stock markets are moving in dispersed order at mid-session, the appetite for risk that has marked the last sessions easing a little after the announcement by the China of a lower growth target than expected and pending several meetings likely to provide indications on the tightening of monetary policy in the United States.

Futures contracts on the New York indices suggest a decline of 0.02% for the Dow Jones, 0.04% for the Standard & Poor’s-500 and perfect stability for the Nasdaq.

In Paris, the CAC 40 gained 0.28% to 7,368.69 around 11:45 GMT after reaching a record early in the session above 7,400. In Frankfurt, the Dax took 0.26% but in London, the FTSE dropped 0.38%, penalized by mining stocks.

The pan-European FTSEurofirst 300 index rose 0.01%, the Eurozone EuroStoxx 50 0.28% and the Stoxx 600 fell 0.04%.

The main Chinese markets closed slightly lower, Beijing having set an economic growth target for this year of 5%, a figure considered cautious by many observers.

“The announcement may disappoint some investors, suggesting a lower likelihood of further policy stimulus, but on the other hand, it may allay some fears of a strong inflationary impact from China,” Kristoffer Kjaer Lomholt said at Danske Bank.

The next big meeting awaiting investors is Jerome Powell’s hearing on Tuesday before the Senate Banking Committee and the next day in the House of Representatives, in the hope of learning more about the intentions of the boss of the Fed on monetary policy.

“Given the latest set of data, the turnaround in inflation easing and the jobs numbers exploding last month, we don’t expect anything more than ‘hawkish’ statements from his share,” said Ipek Ozkardeskaya at Swissquote Bank.

“But it’s still possible that the word ‘disinflation’ will slip out of his mouth and risk appetite will get a boost,” the analyst added.

The agenda for the week also includes Friday the latest monthly figures on the US labor market.

VALUES IN EUROPE

The European basic resources compartment dropped 2.66%, the biggest drop of the day, after the Chinese announcement of a growth target at the bottom of the range of market expectations. Rio Tinto lost 3.13% and Anglo American 4.04%.

LVMH shares gained 1.01%, supported, according to market sources, by an increase in HSBC’s recommendation from “hold” to “buy”.

Telecom Italia advances by 2.94% after the board of directors of the Italian Caisse des dépôts approved the project of an offer to purchase the fixed network of the operator.

EXCHANGES/RATES

On the currency market, the dollar gained 0.11% against a basket of benchmark currencies, erasing some of its losses from last week, and the euro was unchanged at 1.0632 dollars.

Government bond yields are trending lower after the highs reached last week. That of the ten-year German Bund fell below 2.65% after a peak Thursday since 2011 at 2.77%. US yields also fell, to 3.9147% for ten-year securities.

OIL

Oil prices fall with uncertainties about growth in China. Brent lost 1.56% to 84.49 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.54% to 78.45 dollars.

(Laetitia Volga, edited by)

Copyright © 2023 Thomson Reuters