PARIS (Reuters) – The main European stock markets are expected to be dispersed at the opening on Monday, investors repositioning themselves after the publication of a stronger-than-expected American employment report, which wards off the first rate cuts.
According to the first available indications, the Parisian CAC 40 appears stable at the opening. Futures contracts on the FTSE in London suggest an opening advance of 0.11%, against a Dax in Frankfurt and a EuroStoxx 50 without a marked direction.
The monthly report published Friday by the Department of Labor showed that tensions remained high on the job markets in the United States, even though it is one of the main factors of inflation which notably supports the dynamics of the price of services.
While the Federal Reserve showed during its last meeting that it was remaining wait-and-see and would not ease its monetary policy before being certain that inflation is indeed slowing towards its target, the markets have in turn readjusted their rate outlook for 2024 after employment figures. Investors now only expect 120 basis points of monetary easing this year, compared to more than 140 basis points at the start of 2024.
On Monday, markets will be paying attention to the final composite PMI indicators in January for Eurozone countries, as well as investor sentiment for the bloc and producer prices for December. The ISM services index will be published at 3:00 p.m. GMT in the United States.
VALUES TO FOLLOW:
A WALL STREET
The New York Stock Exchange ended higher on Friday, with a record close for the S&P-500, while strong profits and employment figures reassured about the resilience of the American economy, despite fears that the Federal Reserve does not postpone lowering its rates.
The Dow Jones index gained 0.35%, or 134.58 points, to 38,654.42 points. The broader Standard & Poor’s 500 rose 52.42 points, or 1.07% to 4,958.61 points, a record. The Nasdaq Composite advanced 267.31 points (1.74%) to 15,628.954.
The results of Meta Platforms (+20.32%) and Amazon.com (+7.9%) were welcomed by investors.
IN ASIA
The Tokyo Stock Exchange ended higher on Monday, supported by a weaker yen and the rebound on Wall Street on Friday. The Nikkei index gained 0.54% to 36,354.16 points and the broader Topix gained 0.70% to 2,557.47 points.
Exporters took advantage of the weak yen. Toyota Motor rose 1.51%, Nissan 3.31%, while Honda recovered 2.97%. Mazda Motor, very exposed to the American consumer, gained 4.07%.
Chinese markets are rebounding after five consecutive sessions of decline. The Shanghai SSE Composite takes 0.31%, the CSI 300 1.66%, the Hong Kong Hang Seng index 0.69%.
RATE
US yields rise after the monthly US employment report.
The ten-year Treasury yield climbs 3.6 bp to 4.0675%, while the two-year rate rises 4.8 bp to 4.418%.
CHANGES
The dollar strengthens slightly as investors position themselves for a more permanently restrictive Federal Reserve.
The dollar strengthened by 0.11% against a basket of reference currencies, while the euro eroded by 0.04% to $1.078, and the pound sterling by 0.16% to $1.261.
In Asia, the yen is stationary at 148.36 yen to the dollar, like the Australian dollar, at $0.6514.
OIL
The geopolitical situation continues to support crude prices.
Brent rose 0.48% to $77.7 per barrel, with American light crude (West Texas Intermediate, WTI) gaining 0.35% to $72.53.
(Written by Corentin Chappron, edited by Kate Entringer)
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