by Augustin Turpin

PARIS (Reuters) – The main European stock markets are expected to be in disarray at the opening on Monday, after having ended the previous week in the red, the latest economic data having pointed to a slowdown in economic activity in the euro zone, then that operators are awaiting the publication this week of key data on inflation in Europe and the United States.

According to the first available indications, the Parisian CAC 40 could gain 0.20% at opening.

Futures contracts report an increase of 0.19% for the Dax in Frankfurt, a decrease of 0.10% for the FTSE in London and an increase of 0.08% for the Stoxx 600.

Preliminary data on inflation in several euro zone countries (France, Italy and Spain) for the month of June will be published on Friday before those for the entire currency bloc on July 2. They will provide a first glimpse of price action, a key statistic for traders trying to anticipate the pace of the European Central Bank’s (ECB) rate cut this year.

The ECB cut rates on June 6, but persistently high inflation and wage demands raise doubts about the number of cuts to come.

Market participants assess the probability of a further fall in the cost of credit by the end of the year at around 64%, compared to almost 80% before the June meeting.

An upward surprise in inflation could further reduce this probability, especially as investors appear nervous on the bond market with the uncertainty linked to the legislative elections in France on June 30 and July 7.

The geopolitical factor could also have an impact on exchanges, while the first debate of the American presidential campaign is expected on Thursday and the first round of the French legislative elections anticipated this weekend.

VALUES TO FOLLOW: [L8N3IJ154]

A WALL STREET

The stock market ended in disarray on Friday in New York where investors played the cautious card after the publication of statistics showing the strength of the American economy and which are unlikely to encourage the Federal Reserve to reduce rent money.

IN ASIA

The Tokyo Stock Exchange ended higher on Monday, with the Nikkei index finishing up 0.54%, as export-related stocks were supported by a weaker yen.

In China, the composite index of the Shanghai Stock Exchange fell by 0.50% and the CSI 300 of large capitalizations rose by 0.04%.

The Hong Kong Stock Exchange lost 0.84%.

RATE

The yield on ten-year Treasuries lost 0.2 basis points (bp) to 4.2554%.

The ten-year German Bund yield is stable (0.0 bps) at 2.4090%.

CHANGES

The dollar fell slightly (-0.06%) against a basket of reference currencies, while the euro lost 1.04% to 1.0694 dollars.

OIL

Oil prices are catching their breath after increasing 3% last week.

The barrel of Brent and that of American light crude oil (WTI) are stable (0%).

MAIN ECONOMIC INDICATORS ON THE AGENDA OF (date):

COUNTRY GMT INDICATOR PERIOD PREVIOUS CONSENSUS

FROM 10:00 a.m. Ifo institute survey on June 89.7 89.3

the business climate

(Written by Augustin Turpin)

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