by Blandine Henault

PARIS (Reuters) – The main European stock markets are expected to rise on Wednesday at the opening, marking a rebound after a session in the red the day before with the banking sector and in the wake of a poor Chinese indicator.

According to the first indications available, the Parisian CAC 40 could gain 0.8% at the opening. Futures are signaling a rise of 0.68% for the Dax in Frankfurt, 0.49% for the FTSE in London and 0.65% for the Stoxx 600.

Futures on the indices in New York foreshadow a slight increase at the opening, after also a decline the day before, which could support the trend despite the negative orientation of the stock markets in Asia.

The surprise announcement of a tax on bank profits by Italy caused the European banking sector to fall on Tuesday, already worried about a downgrading by Moody’s of the rating of several American banks.

Faced with the wind of panic, the Italian Ministry of the Economy clarified on Tuesday evening that the new taxation could not exceed more than 0.1% of the risk-weighted assets (RWA) of the banks.

While this could contribute to the expected rebound in Europe, announcements from China remain gloomy.

After the very disappointing foreign trade figures on Tuesday, investors took notice overnight of consumer prices in China.

The latter fell by 0.3% in July on an annual basis, a first since February 2021. The decline is however less pronounced than expected, with economists polled by Reuters expecting -0.4%.

“I would say it’s still a very weak report, which underlines the very weak domestic demand in the Chinese economy (…) and I don’t think that will go away soon,” observes Carol Kong, exchange strategist. at Commonwealth Bank of Australia.

“I think the Chinese government will have to do more in terms of support measures to counter deflationary risks.”

VALUES TO FOLLOW:

AT WALL STREET

The New York Stock Exchange ended down on Tuesday as Moody’s decision to downgrade the rating of several banks rekindled fears about the health of the sector and that of the economy.

This is the fifth session in the red – out of six – since the beginning of August.

The Dow Jones index fell 0.45% to 35,314.49 points. The broader S&P-500 lost 0.42% to 4,499.38 points. The Nasdaq Composite fell for its part by 0.79% to 13,884.32 points.

The banks index lost 1.1% after Moody’s warning.

IN ASIA

The Tokyo Stock Exchange fell 0.41% as the close approached, in the wake of Wall Street.

The Hong Kong Stock Exchange fell 0.1% and the mainland China large-cap CSI 300 fell 0.23% after inflation figures also showed a tenth consecutive month decline in producer prices.

Note that the Seoul Stock Exchange is closed for a public holiday.

RATE

After their plunge the day before in a context of risk aversion, bond yields are stabilizing but remain on the downside.

The ten-year Treasuries rate lost more than two basis points to 3.998%, after falling five points the day before and hitting a one-week low of 3.984%.

Investors are awaiting data on consumer prices in the United States on Thursday, crucial for gauging the future path of the Federal Reserve’s monetary policy.

CHANGES

The dollar gave up part of the gains recorded the day before: it lost 0.14% against a basket of reference currencies after taking 0.5% on Tuesday.

The euro regained 0.2% to 1.0975 dollars.

OIL

Fresh Chinese indicators continue to weigh on crude prices as investors worry about the state of demand in the face of a slowdown in the world’s second-largest economy.

The barrel of Brent from the North Sea lost 0.19% to 86.01 dollars and that of American light crude oil (WTI) dropped 0.21% to 82.75 dollars.

NO MAJOR ECONOMIC INDICATOR EXPECTED ON THE AGENDA FOR AUGUST 9

(Written by Blandine Hénault, with Stella Qiu)

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