by Mara Vilcu and Diana Mandia

(Reuters) – Wall Street is expected to decline on Monday and European scholarships are still diving at mid -session, after new remarks by Donald Trump on customs duties, going in the direction of a trade war whatever it costs, and while the European Union is preparing its response.

The withdrawal in New York could however be less than feared at the opening of future in New York indices which then indicated withdrawal from 4% to 5%.

Around 11:15 a.m. GMT, the term contracts indicate a decrease of 1.68% for the Dow Jones, 1.75% for Standard & Poor’s-500 and 2.11% for NASDAQ.

In Paris, the CAC 40 lost 4.20% to 6,969.74 points after losing up to 7% earlier in session. In Frankfurt, the Dax fell by 4.24% and in London, the FTSE 100 yields 3.76%.

The Eurostoxx 50 index is down 4.19%, the FTSEUROFirst 300 drops by 4.18%and the Stoxx 600 drops by 4.13%. The latter now has a withdrawal of more than 16% since his record in closing on March 3.

Barclays lowered its end -of -year forecast on Monday for the Stoxx 600 to 490 points against 580 scheduled for last month, and a fence at 493.33 Friday, citing the risks of recession linked to customs duties.

Donald Trump warned foreign governments on Sunday that they would have to pay “a lot of money” to remove the vast customs duties decided by Washington, describing these taxes as a “medication” and indicating that they are not concerned about the diving of the financial markets.

In Asia, the Hong Kong Stock Exchange knew its strongest daily decrease on Monday (-13.2%) since 1997 and that of Taiwan (-9.7%) accused its strongest withdrawal in a session never recorded.

Beijing retaliated to American customs duties on Friday by its own trade measures, aggravating turbulence in the financial markets, while the European Union reflects on its countermeasures. The ministers of the twenty-seven trade in trade were gathered this Monday in Luxembourg to advance towards a common position.

Investors believe that the growing risk of recession could lead to the American Federal Reserve (Fed) to reduce its interest rates in May.

“The extent and disruptive impact of American trade policies, if they are maintained, would be sufficient to switch an American and global expansion still healthy in the recession,” said Bruce Kasman, head of economic affairs at JP Morgan, estimating the risk of 60%recession.

“We continue to plan a first softening of the Fed in June,” he added. “However, we now believe that the Committee will reduce its rates at each meeting until January, which will bring the top of the target range of interest rates to 3.0%,” said Bruce Kasman.

The values ​​to follow at Wall Street

Large American banks drop in front, the context weighing on the prospects of investment banking and retail banking activities. Morgan Stanley lost 5.3%, Citigroup 5.1%, Goldman Sachs 4.7%. Bank of America, Jpmorgan Chase and Wells Fargo lose more than 3%.

Values ​​in Europe

The banking sector fell by 5%, withdrawing almost 18% since April 2. BNP Paribas lost 3.10%, Crédit Agricole abandoned 3.78%and Société Générale lost 3.08%.

The aerospace and defense companies index loses 4.35%. Rheinmetall fell 3.13%, Dassault Aviation abandoned 4.72%, Thales fell 3.83%and Saab lost 3.04%.

After American customs duties, Bernstein reduced its growth forecast on Monday for the luxury sector for 2025. LVMH lost 3.20% and Kering drops by 6.18%.

RATE

Short -term yields in the euro zone reached a new two and a half years lower on Monday, while investors are betting more on new rate reductions in the European Central Bank.

The yield of the German Bund at two years, the most sensitive to expectations on monetary policy, loses 11.1 base points at 1.7451%.

The German rate at ten years, reference for the euro zone, has a drop of 6.7 base points to 2.5510%.

In the United States, the yield of borrowings at two years fell from 9.2 base points to 3.5775% while that of Treasuries at ten years stabilizes at 3.9829%.

Changes

Investors take refuge on Monday towards the dollar, the yen and the Swiss franc in the context of rout on the global stock markets.

The greenback loses 0.07% against a basket of reference currencies while the euro gains 0.04% at 1.0959 dollars.

The yen benefits from its active refuge character and gains another 0.47% against the dollar, at 146.21 yen for a dollar.

OIL

Oil prices accentuate their losses, climbing trade tensions between the United States and China supplying fears of a recession that would reduce the demand for crude oil while OPEC+ prepares an increase in supply.

Brent lost 2.47% to 63.96 dollars per barrel and American light crude (West Texas Intermediate, WTI) is down 2.65% to 60.35 dollars.

(Written by Mara Vîlcu and Diana Mandiá, edited by Blandine Hénault)

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