by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected to fall on Tuesday, fears about the trajectory of interest rates of the major central banks and the evolution of the economy taking over at the start of the fourth quarter after the brief lull observed at the end of the third trimester.
According to the first available indications, the Parisian CAC 40 should lose 0.66% at the opening, the Dax in Frankfurt 0.70% and the FTSE 100 in London 0.35%. The EuroStoxx 50 index is expected to decline by 0.67%.
The yield on ten-year US government bonds, which is at its highest in 16 years, is weighing on the stock markets while the strength of the ISM manufacturing index in the United States, published on Monday, shows that it is now close to the expansion threshold. This raises hopes of a soft landing for the economy but also reinforces the prospect of an extension of monetary tightening by the Federal Reserve (Fed).
While waiting for the official monthly report on American employment, scheduled for Friday, investors will learn this Tuesday at 12:30 GMT the results of the Jolts survey on job offers in August. The Reuters consensus forecasts a slight drop in these offers, to 8.80 million.
A WALL STREET
The New York Stock Exchange ended mixed on Monday, with the Nasdaq finishing higher in the wake of Nvidia’s gains, as investors remained concerned that the Fed would keep interest rates high for longer than expected. anticipated.
The Dow Jones index fell 0.22%, or 74.15 points, to 33,433.35 points.
The broader S&P-500 gained 0.34 points, or 0.01%, to 4,288.39 points.
The Nasdaq Composite advanced 88.45 points (0.67%) to 13,307.77 points.
Michelle Bowman, one of the Fed’s governors, said Monday she was prepared to vote in favor of another rate hike if economic data showed too slow or insufficient progress in the fight against inflation.
Among the major sectors of the S&P-500, rate-sensitive utilities experienced the biggest decline, falling 4.7%, the first time for the sector since April 2020. Energy also declined. significantly, while technologies recorded an increase of 1.3%.
On the stock side, Nvidia increased by 2.9% after an increase in its recommendation by Goldman Sachs.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index fell by 1.6% to 31,250.8 points and the broader Topix fell by 1.63% to 2,276.65 points as the close approached.
The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) fell by 1.36%, to its lowest level since November 28, 2022.
Markets in mainland China are still closed on Tuesday, a week of annual holidays having started after Friday’s session.
CHANGES
The dollar rose 0.15% against a basket of reference currencies, to a new ten-month high.
The Japanese currency, which is trading at a new low of almost a year against the greenback, is trading at 149.87 yen per dollar, close to the threshold supposed to trigger an intervention by the Bank of Japan (BoJ).
Japanese Finance Minister Shunichi Suzuki said on Tuesday that authorities were closely monitoring the foreign exchange market and were ready to respond, again warning against speculative moves that he said did not reflect economic fundamentals.
The euro fell by 0.12%, to $1.0463, the lowest since December 2022, after the publication of manufacturing PMIs in the region which showed a profound slowdown in demand.
The Australian dollar fell 0.74% against the US dollar, to 0.63155, after the decision of the Australian central bank (RBA) to leave its key rates unchanged.
RATE
The yield on ten-year US Treasury bonds was stable on Tuesday, at 4.6849%, after having climbed the day before to 4.703%, a peak since October 2007.
In addition to Michelle Bowman, other Fed officials, such as Michael Barr, Loretta Mester and Thomas Barkin, made comments on Monday considered restrictive.
OIL
The strength of the dollar and the rise in bond yields are weighing on the oil market: Brent fell by 1.01% to 89.79 dollars per barrel and American light crude (West Texas Intermediate, WTI) by 0.8% to 88 .11 dollars.
(Written by Claude Chendjou, edited by Bertrand Boucey)
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