by Diana Mandia
(Reuters) – Wall Street is expected to rise and European stock markets are advancing on Monday at mid-session thanks to the easing of trade tensions and fears about American regional banks, which weighed on shares last week.
The CAC 40 is, however, an exception, penalized by the fall of the BNP Paribas bank, condemned in the United States for its role in the Sudanese conflict. The Parisian index lost 0.11% to 8,164.89 points around 11:06 GMT.
In Frankfurt, the Dax advances by 1.09% and in London, the FTSE 100 gains 0.33%.
The EuroStoxx 50 index gained 0.65%, the FTSEurofirst 300 gained 0.53% and the Stoxx 600, which had dropped 0.91% on Friday, increased by 0.56%.
New York index futures report an opening up 0.12% for the Dow Jones, 0.19% for the Standard & Poor’s-500 and 0.28% for the Nasdaq.
The week started on a rather positive note in Europe, with stock markets welcoming calm on the trade front after US President Donald Trump told reporters that Washington could reduce tariffs on Chinese goods provided that Beijing also does “certain things” for the United States, including resuming its purchases of soybeans.
The trade escalation between the two powers put stock markets on alert last week, but the tension eased over the days, with Donald Trump even going so far as to declare that his threats of 100% customs duties against Beijing were not viable.
The quarterly results of US regional banks helped to ease concerns about credit risks after a series of announcements in the sector received with concern in recent days.
The markets are also entering a week full of key financial results, including those of Tesla, L’Oréal and Renault, as well as leading macroeconomic indicators, such as data on CPI inflation in the United States, delayed by the partial closure of the American administration, and which will finally be published on Friday.
In France, where the government escaped censure last week, budgetary debates will be at the forefront, with the draft accounts for France in 2026 due to be examined from this Monday by the Finance Committee of the National Assembly.
The respite obtained by Prime Minister Sébastien Lecornu, who promised to suspend the application of the controversial 2023 pension reform, could however be short-lived if budgetary negotiations do not make it possible to find the savings necessary to reduce the country’s deficit.
On Friday, S&P Global Ratings lowered France’s sovereign rating, estimating that fiscal consolidation will be slower than expected in the absence of significant additional measures to reduce the deficit.
VALUES TO FOLLOW AT WALL STREET
VALUES IN EUROPE
BNP Paribas lost 7.6% on Monday and came out at the bottom of the CAC 40, with traders and analysts attributing this decline to the decision of a federal jury in Manhattan, in the United States, which on Friday found the French bank guilty of helping the Sudanese government commit abuses by providing services that violated American sanctions.
Kering, on the other hand, climbed 3.3%, the parent company of Gucci having announced on Sunday evening the sale of its beauty division to the French cosmetics giant L’Oréal for an amount of four billion euros.
Forvia, which reported on Monday a 3.7% drop in its turnover in the third quarter due to negative exchange rate effects and a decline in its main Chinese customers, fell by 5.4%.
Leonardo for its part takes 4% while the Italian aeronautics and defense group is due to hold an extraordinary meeting of its board of directors on Tuesday to discuss the details of a framework agreement concluded with Airbus (+1.5%) and Thales (+3.7%) with a view to forming a European alliance in the field of satellites, a source told Reuters on Monday.
The defense sector advanced 2.57%, recovering from the sharp decline recorded on Friday, when the announcement of a planned summit between Donald Trump and his Russian counterpart Vladimir Putin on the war in Ukraine shook the sector.
The TKMS stock also took advantage of the global boom in the defense sector during its first day on the markets, Monday, to trade at 81 euros, giving the warship manufacturer a valuation approximately twice as high as expected, at 5 billion euros.
RATE
Euro zone bond yields are rising slightly as concerns over trade tensions and the health of U.S. regional banks have eased, slowing the recent flight to safe havens. The ten-year German Bund yield rose 1.2 basis points to 2.5889%. The two-year bond advanced by 0.8 basis points to 1.9210%.
In France, the yield on the ten-year OAT rose 2.2 basis points to 3.3832%, while investors also digested the lowering of the sovereign rating by S&P Global Ratings.
In the United States, the yield on ten-year Treasuries is almost stable at 4.0106%. The two-year rose 0.6 basis points to 3.4698%.
CHANGES
The greenback appreciated Monday by 0.12% against a basket of reference currencies, while the euro gained 0.02% to 1.1653 dollars.
OIL
Oil prices are falling under pressure from concerns about a supply glut.
Brent fell 0.8% to $60.80 per barrel and American light crude (West Texas Intermediate, WTI) fell 0.89% to $57.03.
(Written by Diana Mandiá, edited by Blandine Hénault)
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