by Diana Mandia

(Reuters) – Wall Street is expected to be hesitant on Tuesday and European stock markets are in the red at mid-session, suffering from less than optimistic outlooks on rates in the United States and geopolitical tensions in the Middle East.

Futures on New York indices signal an opening on Wall Street up 0.32% for the Dow Jones, and down 0.07% for the Standard & Poor’s-500 and 0.14% for the Nasdaq.

In Paris, the CAC 40 lost 1.22% to 7,946.57 around 11:05 GMT. In Frankfurt, the Dax fell by 1.36% and in London, the FTSE lost 1.32%.

The pan-European FTSEurofirst 300 index lost 1.3%, the EuroStoxx 50 of the euro zone 1.32% and the Stoxx 600 1.34%. The latter reached its lowest level in six weeks, weighed down by the decline in basic resources.

Investors are experiencing renewed risk aversion amid renewed tensions in the Middle East and while the latest figures on retail sales in the United States, stronger than expected, suggest that the Reserve’s monetary policy federal government (Fed) will remain restrictive for longer than expected.

Despite diplomatic efforts by world powers to avoid an escalation in the Middle East, Iranian President Ebrahim Raisi on Tuesday warned of a harsh response to any action against Iran’s interests. The remarks follow those of Israeli army chief of staff Herzi Halevi, who said on Monday that Israel would retaliate for Tehran’s drone and missile attack over the weekend.

The first quarter results season is also starting in Europe, with some market heavyweights expected after the close of the stock market, including the luxury giant LVMH.

VALUES TO FOLLOW AT WALL STREET

Banks Bank of America and Morgan Stanley will in turn publish their quarterly results.

VALUES IN EUROPE

Ericsson, which reported adjusted profit for the first quarter above expectations on Tuesday, climbed 6.5%.

The British fashion chain Superdry, faced with weak demand and a lack of liquidity, fell by 33% after announcing its recovery plan.

Anglo American and Rio Tinto fell by 3.3% and 2.6%, respectively, due to the fall in the prices of non-ferrous metals, weighed down by the rise in the US dollar.

Arcelormittal, downgraded by Deutsche Bank to “hold” from “buy” and suffering from falling metal prices, lost 6.3%.

RATE

Bond yields in the euro zone rose after the publication of solid US data, with the bond market also experiencing some volatility with tensions between Israel and Iran.

The European Central Bank’s (ECB) rate cut in June, to which the institution opened the door during its last monetary policy meeting, could be called into question if a geopolitical shock causes bond prices to rebound. energy and inflation, warned Tuesday the member of the Board of Governors of the institution, Olli Rehn.

The German ten-year yield gained almost 3 basis points to 2.46%, while that of the two-year rate was stable at 2.9%.

The American bond markets are also progressing: the yield on ten-year Treasuries gains around 2 basis points to 4.6447%, and that on two-year debt one bps to 4.9487%.

CHANGES

The dollar, which reached its highest level in five months against the pound and the euro on Tuesday, gained 0.06% against a basket of reference currencies. The euro rose 0.04% to $1.0626.

OIL

Oil prices are falling slightly as easing concerns over supply risks and escalation between Iran and Israel outweigh first-quarter Chinese economic data.

Brent fell 0.41% to $89.73 per barrel and American light crude (West Texas Intermediate, WTI) fell 0.46% to $85.02.

(Written by Diana Mandiá, edited by Blandine Hénault)

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