PARIS (Reuters) – The main European stock markets are expected to fall on Thursday at the opening, the state of the Chinese real estate sector and concerns about the trajectory of US rates weighing on investor sentiment.

The first indications available indicate that the Parisian CAC 40 would decline by 0.46% at the opening. Futures contracts on the FTSE in London suggest a decline of 0.41%, against 0.65% for the Dax in Frankfurt, and 0.63% for the EuroStoxx 50.

In addition to the mediocre activity data published at the beginning of the week in China, there were disappointing indicators on the prices of new homes, which fell for the first time this year in July. Importantly, the Zhongrong Trust Group missed installments on dozens of investment products, raising fears of a contagion of problems from the real estate sector to the financial sector. “Virtually all of July’s data fell well short of market expectations, sending a clear and unmistakable message: China is in the throes of all-out deflation,” said Wei Yao, director of Asia Pacific research at Societe Generale. IPC.

The minutes of the Federal Reserve’s July monetary policy meeting did not bring relief to markets, which now fear that the central bank will raise rates again.

The document thus specifies that during the last monetary policy meeting, at the end of July, “some” of the members of the Governing Council expressed concern about the risks of an excessive tightening of monetary conditions, while “most” of the members preferred to mention the risks associated with excessively high inflation.

While most traders are still betting on a pause in September, some analysts, such as ING economists, now fear another Fed rate hike at November or December meetings.

AT WALL STREET

The minutes of the Fed’s monetary policy meeting weighed on the New York Stock Exchange indices.

The Dow Jones fell 0.52%, or 180.65 points, to 34,765.74 points, the broader S&P 500 fell 33.53 points, or 0.76%, to 4,404.33 points, and the Nasdaq Composite fell for its part by 156.42 points (1.15%) to 13,474.63 points.

IN ASIA

Japanese markets pull back after Fed minutes and China concerns. The Nikkei lost 1.22% to 31,377.84 points, the Topix fell 0.36% to 2,252.64 points.

The Tokyo Stock Exchange’s 33 sub-indexes are all down, with steelmakers, down 1.25%, posting the worst sector performance.

Chinese indices falter with poor activity data. Shanghai’s SSE Composite and CSI 300 were flat, with Hong Kong’s Hang Seng index dropping 0.12%.

CHANGES

Currency markets are reacting to the implications of the Fed minutes, with the dollar strengthening at the expense of other currencies.

The dollar advanced 0.10% against a basket of benchmark currencies, the euro eroding 0.09% to 1.0864 dollars, while the pound sterling dropped 0.05% to 1.2721 dollars.

In Asia, the yen lost 0.03% to 146.39 yen per dollar, falling during the session below the level that had triggered an intervention by the Bank of Japan at the end of last year. The Australian dollar was down 0.54% at $0.6388.

RATE

US yields are repositioning after the Fed minutes and are up. The ten-year Treasury yield rose 3.4 basis points to 4.2919%, while the two-year rate rose 1.3 bp to 4.9931%.

OIL

Crude is hesitating amid uncertainty for near to medium-term demand, with China data and Fed minutes potentially raising fears of a slowdown in oil demand.

Brent crude was stable at $83.38 a barrel, with US light crude (West Texas Intermediate, WTI) falling 0.20% to $79.22.

(Written by Corentin Chapron, edited by Jean-Stéphane Brosse)

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