by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected to rise cautiously on Monday at the start of a week which will be marked by decisions from the European Central Bank (ECB) and American inflation figures.

According to the first available indications, the Parisian CAC 40 should gain 0.33% at the opening, the Dax in Frankfurt 0.28% and the FTSE 100 in London 0.39%. The EuroStoxx 50 index is expected to increase by 0.33%.

After the tumults of the past week linked to the return of inflationary risk and uncertainties about the evolution of interest rates, investors are awaiting August data on consumer prices (CPI) in the United States on Wednesday. and Thursday the ECB’s monetary policy announcements.

The Reuters consensus forecasts a reacceleration of the US CPI in August to 0.6% month-on-month (compared to +0.2% in July) and an increase of 3.6% year-on-year (compared to +3, 2% the previous month).

The market has nevertheless been optimistic since Friday in the hope that the American Federal Reserve (Fed) has finished with its cycle of monetary tightening. The probability of a status quo on Fed rates is 93% for the September 20 meeting, but for the November meeting this probability drops to 53%, according to the CME Group’s Fedwatch barometer.

As for the European Central Bank, the Reuters survey predicts that the ECB will opt for a pause on September 14, but economists are very divided for the future.

In terms of today’s economic indicators, investors will learn the European Commission’s economic forecasts at 09:00 GMT.

A WALL STREET

Wall Street ended slightly higher on Friday, supported by technology stocks which allowed the Nasdaq to end four consecutive sessions of decline.

The Dow Jones index gained 0.22%, or 75.86 points, to 34,576.59 points.

The broader S&P-500 gained 6.35 points, or 0.14%, to 4,457.49

The Nasdaq Composite rose 12.69 points (0.09%) to 13,761.53 points.

Over the past week, the S&P fell by 1.29%, the Dow Jones by 0.75% and the Nasdaq by 1.93%.

The rise in technology stocks was helped by falling Treasury yields.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index ended down 0.43% to 32,467.76 points, while the broader Topix gained 0.06% to 2,360.48 points.

The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) fell by 0.3%.

In China, the Shanghai SSE Composite lost 0.82% and the CSI 300 lost 0.72%, Chinese investors having sold their shares in real estate, remaining unconvinced by the efforts of the authorities to revive activity in the sector.

The real estate developers’ index on the Hang Seng in Hong Kong fell by almost 4% and the real estate index in mainland China fell by 3.24%.

“The real estate market needs to stabilize first for any significant economic rebound to occur in China,” notes David Chao, Asia-Pacific markets strategist at Invesco.

The market is also affected by the fall of the e-commerce giant Alibaba Group (-4.4%) after the surprise announcement of the departure of its former general manager Daniel Zhang from the group’s “cloud” (cloud computing) branch. This division, number one on the Chinese market, must be separated from Alibaba next year.

CHANGES

The dollar, which last week recorded its eighth weekly increase in a row, the longest series in this direction since 2014, fell slightly (-0.19%) against a basket of reference currencies.

The Japanese currency strengthened by around 1% to 146.37 yen per dollar, supported by comments over the weekend from the governor of the Bank of Japan (BoJ). Kazuo Ueda said Japan’s central bank could end its negative interest rate policy when the 2% inflation target is in sight, according to the Yomiuri newspaper.

The euro is trading at 1.0724 dollars (+0.23%).

RATE

On the bond market, the yield on ten-year Japanese government bonds reached its highest level in almost ten years on Monday in reaction to Kazuo Ueda’s latest statements. The ten-year JGB rate thus jumped by 5.5 basis points, to 0.7%, the highest since January 2014.

The yield on ten-year US Treasury bonds is rising again, gaining almost four points, to 4.296%.

The yield on the German Bund of the same maturity stands at 2.639%, also up by around four points.

OIL

The oil market is affected by concerns about the Chinese economy but the barrel of Brent remains above 90 dollars.

In early trading, Brent lost 0.21% to $90.46 per barrel and American light crude (West Texas Intermediate, WTI) lost 0.56% to $87.02.

(Written by Claude Chendjou)

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