by Pauline Foret
PARIS (Reuters) – The main European stock markets are expected to look for direction at the opening on Monday, after China’s announcement of the plan to revive its economy on Saturday, and while awaiting the next meeting of the Bank European Central (ECB) on Thursday, which could see a further reduction in key rates.
According to the first available indications, the Parisian CAC 40 could open stable at the opening, losing 0.01%.
Futures contracts also report an opening up 0.17% for the Dax in Frankfurt, a fall of 0.19% for the FTSE in London, and 0.02% for the Stoxx 600.
At a highly anticipated press conference on Saturday, Chinese Finance Minister Lan Foan pledged to increase debt “significantly” but left markets uncertain about the overall scale of the debt. stimulus measures, a detail which would have been necessary to assess the duration of a potential stock market rally.
These measures, which include aid to local governments to resolve debt problems, support for the real estate market and the reconstitution of the capital of state banks, underline the commitment of the Chinese authorities to supporting their economy by difficulty.
However, the limited scope of efforts to boost consumption remains a major concern for investors, particularly after data released on Sunday showed that consumer price inflation fell unexpectedly in China in September, coming add to a deflation of producer prices.
The European luxury sector risks being at the center of market attention due to its strong activity in China.
Furthermore, the ECB is expected to make a decision on the future of its monetary policy at its meeting on Thursday, with investors counting on a rate cut of 25 basis points.
The Federal Reserve’s Neel Kashkari and Christopher Waller are expected to speak later today, which could provide some clues about the U.S. central bank’s outlook.
UK inflation data is due on Wednesday.
VALUES TO FOLLOW
LVMH announced on Friday the departure of Kim Jones from Fendi, while the British designer will retain his role as artistic director of the Dior Homme collection.
A WALL STREET
The New York Stock Exchange ended up on Friday, the Dow Jones and the S&P 500 at closing records, thanks to good results from major American banks and a reassuring index on the control of inflation and the continuation of the decline rates.
Banks JP Morgan and Wells Fargo gained 4.4% and 5.6% respectively after announcing stronger than expected third quarter profits.
BlackRock rose 3.6% after reporting, for the third consecutive quarter, a record level of assets under management.
The S&P sector index of banking stocks rose 4.2% to its highest since February 2022.
Tesla shares fell 8.8% after the electric vehicle manufacturer presented its robot taxi project, which limited the Nasdaq’s gains.
IN ASIA
Asian stock markets are experiencing some volatility this Monday, with the reception of the vast economic recovery promises made by China over the weekend being mixed.
The Tokyo Stock Exchange is not open this Monday.
In China, the composite index of the Shanghai Stock Exchange increased by 2.12% and the CSI 300 of large capitalizations advanced by 5.11%.
The Hong Kong Stock Exchange gained 0.23%.
Data on the trade balance in China are expected during the day.
RATE
The Treasury market is closed this Monday due to Columbus Day. On Friday, the US bond yield fell after data on producer prices in the United States. Expected remarks from Neel Kashkari and Christopher Waller, two Fed officials, are likely to have an influence on rates when the market reopens on Tuesday.
The ten-year German Bund yield, benchmark for the euro zone, lost 1.1 basis points to 2.2640%, compared to a drop of 3.2 basis points to 2.2280% for the two-year.
CHANGES
The dollar maintained its gains in Asian trading on Monday, as a public holiday in Japan reduced liquidity and allowed markets to focus their attention on China’s somewhat disappointing stimulus measures.
The dollar gained 0.12% against a basket of reference currencies.
The euro lost 0.12% to 1.0924 dollars.
OIL
Oil prices fell on Monday after data showed a fall in China’s inflation rate, while a lack of clarity over China’s economic recovery plan fueled fears over fuel demand in the broader importer of crude oil in the world.
The barrel of Brent and American light crude oil (WTI) both fell by 1.09%.
(Written by Pauline Foret, edited by Augustin Turpin)
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