by Blandine Henault
PARIS (Reuters) – The main European stock markets are expected to rise slightly at the opening on Monday, encouraged by the progression of Wall Street futures, despite geopolitical fears linked to the conflict in the Gaza Strip and the cautious approach numerous central bank meetings throughout the week.
Futures contracts report an increase of 0.32% for the CAC 40, 0.11% for the Dax in Frankfurt, 0.29% for the FTSE in London and 0.39% for the Stoxx 600.
Israel launched a second phase of its offensive against the Palestinian Islamist group Hamas in the Gaza Strip over the weekend with a ground intervention accompanied by intense bombardments.
The conflict continues to fuel geopolitical uncertainty in the region and fears of a spread to border countries.
At the same time, after an already busy last week, investors will learn in the coming days a new series of company results, economic indicators and decisions from central banks, including the Bank of Japan (Tuesday), the Federal Reserve (Wednesday) and Bank of England (Thursday).
VALUES TO FOLLOW:
A WALL STREET
The New York Stock Exchange ended in disorganized order on Friday, at the end of a turbulent week during which investors had to digest mixed results and economic data which raised fears that the American Federal Reserve (Fed) would not maintain its monetary policy in restrictive territory.
The Dow Jones index lost 1.12% to 32,417.59 points. The broader S&P-500 lost 0.48% to 4,117.37 points to enter contraction territory with a drop of more than 10% from its mid-July high.
The Nasdaq Composite advanced its side by 0.38% to 12,643.01 points thanks to the progress of Amazon and Intel after their results.
Publications of company results will continue in the coming days, notably Apple on Thursday.
For now, futures contracts on American indices are reporting an increase of around 0.3% to 0.6% at the opening on Monday.
IN ASIA
The Tokyo Stock Exchange ended down 0.95% amid speculation that the Bank of Japan could change its yield curve control policy following its monetary policy meeting on Tuesday.
Stock markets in mainland China rose with signs of increased government support for the economy, while the Hang Seng index on the Hong Kong Stock Exchange fell 0.16%, penalized by geopolitical fears.
In terms of values, real estate developer Evergrande lost 9.32% after falling up to 22% earlier in the session. A Hong Kong High Court hearing into the group’s liquidation was adjourned until December 4, as the judge gave Evergrande one last chance to present a restructuring plan almost two years after defaulting on its debt.
RATE
The yield on ten-year Treasuries is stable at 4.8454% after climbing 30 basis points this month and hitting a 16-year high of 5.021%.
This sharp rise in borrowing costs has convinced analysts that the Federal Reserve should opt for the status quo at the end of its monetary policy meeting on Wednesday, with a maintenance of the federal funds range between 5.25% and 5 .5%.
On Friday, the market will take note of the monthly report on employment in the United States, which should have created 188,000 jobs in October according to consensus, signaling a still solid labor market.
In Europe, the yield on the German Bund lost almost six basis points to 2.772% ahead of third-quarter German gross domestic product (GDP) data expected at 08:00 GMT.
The consensus expects the German economy to contract by 0.3% this quarter compared to the previous one.
Investors will also follow inflation data in Germany for the month of October at 12:00 GMT.
CHANGES
Calm reigns on the currency side before the multiple central bank meetings and economic indicators expected.
The dollar is unchanged against a basket of reference currencies including the euro which is trading at 1.0554 dollars.
OIL
Crude prices are falling in a wait-and-see context ahead of central bank decisions and Chinese PMI indicators expected this week.
A barrel of Brent lost 1.13% to $89.46 and that of American light crude lost 1.37% to $84.37.
(Written by Blandine Hénault, edited by Tangi Salaün)
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