PARIS (Reuters) – Wall Street is expected to rise while European stock markets are mixed at mid-session in a context of high bond yields and caution before the publication of crucial indicators this week.
New York index futures suggest Wall Street opening in the green, with the Dow Jones rising 0.14%, compared to 0.17% for the Standard & Poor’s 500 and 0.14% for the Nasdaq.
In Paris, the CAC 40 lost 0.4% to 7,040.05 points at 10:43 GMT, compared to an increase of 0.28% for the FTSE in London, and a decline of 0.48% for the Dax in Frankfurt.
The pan-European FTSEurofirst 300 index lost 0.23%, compared to 0.35% for the EuroStoxx 50 and 0.36% for the Stoxx 600.
The almost uninterrupted rise in sovereign yields since the Federal Reserve’s last monetary policy meeting on September 20 is weighing on risky assets. The yield on the American 10-year thus remains at its highest level since 2007, with investors reassessing the trajectory of rates in the United States.
Two Fed officials reiterated Monday that monetary policy must remain restrictive “for a moment” in order to control inflation while the activity indicators published Monday raise fears that the American economy will be more resistant to increases than expected. rates, which would encourage the Fed to raise them further.
“The markets are once again selling bonds and buying the dollar, a position which has been the norm since mid-July. Two factors have contributed to consolidating these positions: the improvement in the ISM manufacturing and the restrictive speech of the Fed”, summarize the strategists of ING.
Caution is all the more significant as several crucial indicators are expected this week.
Manufacturing orders in the United States will be published on Wednesday, followed by new unemployment claims on Thursday and the monthly employment report on Friday, essential for the trajectory of monetary policy.
In the euro zone, the final composite PMI indicators are expected on Wednesday.
VALUES TO FOLLOW IN WALL STREET
Meta Platforms plans to offer its European users a $14-a-month subscription for ad-free access to Instagram and Facebook, according to a proposal submitted to regulators, the Wall Street Journal reported Monday.
Boeing plans to boost production of its 737 to a record high of at least 57 units per month by July 2025, reflecting rising orders and recovering demand after two crashes in 2019, according to two sources with knowledge folder.
VALUES TO FOLLOW IN EUROPE
Sanofi advances 1.0%, among the best performances in the CAC 40, after the announcement of a partnership with J&J on a vaccine candidate against E.Coli.
Technip Energies posted one of the best performances on the Stoxx 600, gaining 2.04%, after an increase in its price target by Citigroup.
British online fashion retailer Boohoo plunges 10.96%, at the bottom of the Stoxx 600, in reaction to the announcement of a 17% drop in its turnover for the half-year ended at the end of August and gloomy forecasts for the entire exercise. Zalando fell 3.75%, Deutsche Bank having lowered the group’s adjusted EBIT forecast and its price target.
The public equipment sector shows the biggest sectoral decline in the Stoxx 600, at its lowest in 10 months, with the outlook for higher rates. Conversely, the banking sector, which tends to benefit from higher interest rates, grants itself 0.33%.
RATE
Yields on long American securities continue to rise, reaching records since 2007, the risks of a “shutdown” in the United States having been ruled out while the activity indicators published on Monday have revived fears of higher key rates, Longer.
The yield on the ten-year Treasury rose by 2.1 basis points to 4.7036%, with the two-year remaining stable at 5.1188%.
The German ten-year yield rose by 2.2 bp to 2.932%, while that of the two-year rate eroded by 1.3 bp to 3.213%.
CHANGES
The dollar continues to rise, in the wake of better than expected activity indicators and the outlook for higher rates.
The dollar gained 0.16% against a basket of reference currencies, the euro gained 0.04% to 1.048 dollars and the pound sterling lost 0.2% to 1.2062 dollars.
OIL
Oil is declining, under pressure from a one-year high dollar and a possible resumption of Iraqi oil exports through Turkey, which would ease supply tensions.
Brent fell 0.69% to $90.08 per barrel, with American light crude (West Texas Intermediate, WTI) dropping 0.6% to $88.29.
(Written by Corentin Chappron, edited by Bertrand Boucey)
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