by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected to be unchanged at the opening on Wednesday in the absence of new catalysts, the rebound of the banks now fading and giving way to questions about the evolution of the economy, the rates interest and inflation.
Futures contracts on indices suggest an increase of 0.36% for the CAC 40 in Paris, 0.38% for the Dax in Frankfurt, 0.08% for the FTSE 100 in London and 0.41% for the EuroStoxx 50.
While a large part of the fears surrounding banks has been ebbing since Monday with the announcement of the takeover of the assets of Silicon Valley Bank (SVB) by First Citizens Bank, the market is now awaiting new elements in the sector as in evidenced by the volatility of stock market indices.
“Investors have not completely lost their anxiety (…) and signs of a major regulatory overhaul are likely to weigh on the sector until details emerge,” said Robert Carnell, director of research. for the Asia-Pacific region at ING.
Hearing Tuesday by a Senate committee, Michael Barr, the vice chairman of the United States Federal Reserve (Fed), said that SVB had had “disastrous” risk management before its bankruptcy, while Andrea Enria, head of supervision of the banking sector within the European Central Bank (ECB), underlined at the start of the week the need for increased surveillance of the sector in view of the recent turbulence.
On the macroeconomic level, while the market fears an economic recession in view of the tremors on the banks, investors will learn at the end of the week of the final data on the gross domestic product (GDP) in the United States in the fourth quarter, the February ISM indices of services activity and the February PCE price index, the Fed’s preferred measure of inflation.
Markets are pricing in a 51% chance of a dovish Fed rate at its next meeting, according to CME Group’s FedWatch Barometer. This probability was 60% on Tuesday.
Apart from consumer sentiment in Germany and France, today’s agenda is practically empty.
VALUES TO FOLLOW IN EUROPE:
AT WALL STREET
The New York Stock Exchange ended slightly lower on Tuesday, penalized in particular by profit-taking on technology stocks, which recently performed well.
The Dow Jones index fell 0.12%, or 37.83 points, to 32,394.25 points.
The broader S&P-500 fell 6.26 points, or 0.16%, to 3,971.27 points.
The Nasdaq Composite fell for its part by 52.76 points (0.45%) to 11,716.08 points.
After falling to six-month lows last Friday, US Treasury yields rebounded on the back of admittedly measured optimism among investors about the health of the US banking sector.
The movements in fixed income caused the decline of the technological giants, including Apple and Microsoft.
Against the trend, Alibaba Group Holding jumped 14.3%, the Chinese giant having announced that it would split into six separate units.
On the Tokyo Stock Exchange, the Nikkei index advanced 0.89% to 27,762.48 points and the Topix, larger, took 1.12% to 1,988.65 points as the closing approached.
In China, the Shanghai SSE Composite lost 0.08%, while the CSI 300 gained 0.25%.
The MSCI index comprising stocks from Asia and the Pacific (excluding Japan) gained 0.82%.
At foreign exchange, the dollar rose 0.16% against a basket of benchmark currencies after two consecutive sessions of decline.
The euro is trading at 1.0836 dollars (-0.06%)
The yield on ten-year US Treasury bills was stable at 3.5658%, but the two-year one still gained more than two basis points, at 4.0907% after the strong increases the day before.
The oil market progressed for the third consecutive session, still supported by fears over supply after the suspension of crude oil exports from Iraqi Kurdistan.
Brent gained 0.36% to 78.93 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.64% to 73.67 dollars.
(Written by Claude Chendjou, edited by Matthieu Protard)
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