(Shell in the title)

by Diana Mandia

(Reuters) – Wall Street is expected to decrease on Tuesday and the European scholarships, which were practically stable at the opening, are in the red on mid -session while Friedrich Merz could not obtain, to everyone’s surprise, the support of a majority of deputies to be confirmed in the first ballot in the German Chancellery. Futures in New York indices report an opening of Wall Street down 0.46% for Dow Jones, by 0.74% for Standard & Poor’s-500 and 0.97% for NASDAQ, US President Donald Trump having rekindled concerns about customs duties on pharmaceuticals, while certain negative results of business Investors. In Paris, the CAC 40 lost 0.47% to 7,691.70 points around 11:31 GMT. In Frankfurt, the Dax recedes 0.87% and in London, the FTSE 100 yields 0.13%.

The Eurostoxx 50 index fell 0.65%, the FTSEURofirst 300 lost 0.40%and the Stoxx 600 abandons 0.34%.

The session, rather wait -and -see at the beginning of the morning while the federal reserve (Fed) and the Bank of England must announce their monetary policy decisions in the week, changed in the red when Friedrich Merz did not obtain the support of an absolute majority of deputies to be confirmed in the first round of the vote on the German Chancellery.

If this setback, unexpected and unprecedented in the history of the country, do not we are in the chances of the leader of the conservatives to access the Chancellery, it translates the doubts that surround its desire to pursue a more flexible budgetary policy to revive a fragile economy by the consequences of the war in Ukraine and the commercial policy of the American president Donald Trump.

“I did not expect what happened today,” said George Lagarias, economist at Forvis Mazars, while adding that the markets would be very surprised if Friedrich Merz was not elected Chancellor. Parliament has 14 days to elect a new leader – Friedrich Merz or someone else.

Investors also digest the final indices of purchasing directors (PMI) of the euro zone, which show that the activity continued to grow in April, but at a slower rate, demand having been weakened and the sector of services having almost stagnated.

Before the vote of the German Bundestag, the session was rather stable, investors awaiting decisions on the rates of the Fed and the BO on Wednesday and Thursday, respectively, and above all comments about the impact of customs duties on the plans of the two central banks.

The American president’s pricing policy remains at the center of concerns, although there is little tangible progress in possible negotiations to avoid a commercial escalation between the United States and China.

Donald Trump contributed on Monday evening to reduce optimism by saying that he planned to announce customs duties on pharmaceutical products in the next two weeks.

Values ​​in Europe

The European Defense sector, the most likely to benefit from the investment plan provided by Friedrich Merz with the historic reform of debt brake, cedes 0.97% and displays one of the largest folds in the Stoxx 600 index.

Hugo Boss, who reported on a quarterly turnover above expectations on Tuesday and maintained his forecasts for the whole year, increased by more than 5%.

In London, Deliveroo advances 1.8% after Doordash announced on Tuesday the acquisition of the British Deliveroo meal delivery company for 3.40 billion euros.

The manufacturer of Philips medical devices loses 3% when he announced Tuesday to expect a net impact of customs duties between 250 to 300 million euros in 2025 and lowered his forecast for annual basic profit.

ArcelorMittal, which is holding its general assembly on Tuesday against a project to remove more than 600 jobs in France, lost 2%.

RATE

For the moment, the reaction of the bond market at the draft in Germany is limited. The yield of the German Bund at ten years takes 1.2 base points at 2.5320%. The two -year -old decreases approximately 1 base point to 1.7,610%.

“By judging by the reaction of the market, it seems that the failure of Merz during the first vote is perceived as a temporary difficulty rather than as the announcement of a possible change in political direction,” said Richard McGuire, analyst at Rabobank, adding that the debt Rubicon had been crossed, Germany now having the capacity to spend beyond the previous limits imposed by the constitutional brake.

In the United States, the yield of Treasuries at ten years took 0.4 base points at 4.3472%. The two years fell for its part of 2.5 base points to 3.8158%.

Changes

Donald Trump’s often erratic trade policies continue to supply significant greenback sales, pushing the Euro, Yen and Swiss Franc on the rise.

The US dollar fell on Tuesday 0.24% against a basket of reference currencies, while the European currency advances 0.13% to 1.1329 dollars.

As for emerging currencies, the Taiwanese dollar has taken 8% in two sessions, an unprecedented level, to reach three -year summits, while in Hong Kong, the de facto central bank bought $ 7.8 billion to prevent the local currency from strengthening and breaking its anchoring in the greenback, movements highlight the fragility of the American currency.

OIL

The oil market displays a technical rebound after a sharp decline on Monday following the decision of OPEC+ to further accelerate its production increases.

The Brent took 2.01% at 61.46 dollars per barrel and the American light crude (West Texas Intermediate, WTI) gained 2.12% to 58.34 dollars.

(Written by Diana Mandiá, edited by Augustin Turpin)

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