by CORENTIN CHAPPRON
PARIS (Reuters) – Wall Street is expected to rise slightly on Monday ahead of a week marked by the publication of major American indicators, while European stock markets advanced at midday after encouraging developments in China.
Futures on New York indices suggest an opening up 0.22% for the Dow Jones, 0.14% for the Standard & Poor’s 500 and 0.27% for the Nasdaq.
In Paris, the CAC 40 rose by 0.59% to 7,272.32 points around 11:05 GMT, against an increase of 0.43% for the Dax in Frankfurt. The London Stock Exchange is closed due to a public holiday.
The EuroStoxx 50 advances by 0.58% and the Stoxx 600 by 0.49%.
China on Sunday announced a halving of stamp duty on stock trading to support its sluggish domestic markets and provide liquidity to the real estate sector. The Chinese securities regulator has also authorized the launch of 37 investment funds.
However, like the measures taken previously by the Chinese government, these developments are targeted and will not be enough on their own to revive a momentum of growth at a standstill, believe market observers.
“China is striving to revive its flagging engine of growth, but economic remedies considered orthodox in the West are being dismissed for their apparent incompatibility with Xi Xinping’s thinking,” said Benjamin Picton, senior strategist at Rabobank.
“The markets have been waiting for months for signs of a large-scale recovery but (…) it may not materialize, quite simply”.
The week will also be loaded with economic indicators, inflation in the euro zone and in the United States and data on the American labor market being expected in the coming days. The publication on Thursday of the PMI activity indicator for China should confirm the slowdown in the economy, according to the consensus.
THE VALUES TO FOLLOW IN WALL STREET
VALUES IN EUROPE
Casino climbed 6.62%, the group having announced on Friday that the president of the Commercial Court of Paris has temporarily suspended all payment obligations in respect of bonds issued by the group.
Renault rises by 1.02%. The automaker is aiming to spin off Ampère, its electrical and software unit, in November before considering an initial public offering (IPO) for the spring of 2024, chief executive Luca de Meo said on Monday.
RATE
European bond yields rose moderately after restrictive comments from Governors Robert Holzmann and Martins Kazaks, and despite Eurozone private credit data showing credit production slowing but remaining in positive territory in July.
The German ten-year yield rose 1.7 bp to 2.573%, while that of the two-year rate rose 3.4 bp to 3.066%.
The 10-year Treasury yield held steady at 4.2374%, versus a 4.4bp rise to 5.0999% for the two-year.
CHANGES
Calm prevails on the currency side as traders digest the implications of the Jackson Hole symposium.
The dollar was stable against a basket of benchmark currencies, while the euro rose 0.12% to 1.0813 dollars.
OIL
Oil is hesitating after the latest measures from Beijing, which could support demand from the world’s largest oil importer in the second half of the year, but which remain limited in scope.
Brent fell 0.15% to 84.35 dollars a barrel, US light crude (West Texas Intermediate, WTI) gaining 0.05% to 79.87 dollars.
(Written by Corentin Chapron, edited by Blandine Hénault)
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