Rise in sight in Europe, relief on the Fed – 07/15/2022 at 08:19


IMPORTANT EUROPEAN SCHOLARSHIPS EXPECTED TO UP

PARIS (Reuters) – Major European stock markets are expected to rise Friday after statements by two of the top US monetary policymakers downplaying the risk of a 100 basis point rate hike, an assumption that hurt stocks in the last two sessions.

Futures contracts on indices suggest an increase of 0.82% for the Dax in Frankfurt, 0.49% for the FTSE 100 in London and 0.94% for the EuroStoxx 50. As for the CAC 40 in Paris, according to the first indications present.

Fed Governor Christopher Waller and James Bullard, the chairman of the Federal Reserve’s regional branch in St. Louis, both said Thursday they favor the hypothesis of a 75 basis point increase in the target fed funds rate during the next year. monetary policy meeting on 26 and 27. July.

These comments, which are all the more important because they come from two of the most “hawkish” members of the Fed’s Federal Open Market Committee (FOMC), weaken the hypothesis of a 100 basis point increase, which investors have expressed after the above. increasingly credible. -expected figures for consumer prices to be published on Wednesday and producer prices to be published on Thursday.

For Christopher Waller, “the markets may be a little carried away” on Wednesday.

The relief over the prospects for a rise in US interest rates should therefore outweigh the disappointment caused by the day’s Chinese economic indicators. The world’s second largest economy shrank by 2.6% in the second quarter from the previous three months.

However, investors will be watching a new set of US indicators, including monthly retail sales, industrial manufacturing numbers and the first estimate of the University of Michigan consumer confidence index. Banks Wells Fargo and Citigroup also have to present their quarterly results.

VALUES TO FOLLOW:

AT WALL STREET

The New York Stock Exchange ended well above the low for the day on Thursday, with the Nasdaq even trading slightly higher towards the end as investors explored the impact of disappointing results from JPMorgan Chase and Morgan Stanley and risks in the hours ahead. related to producer price figures.

The Dow Jones index fell 0.46% or 142.62 points to 30,630.17, the Standard & Poor’s 500 lost 11.40 points or 0.30% to 3,790.38 and the Nasdaq Composite lost 3.60 points. .03%) to 11,251.19 points.

The S&P 500 had previously lost a staggering 2.1% following the results of JPMorgan Chase and Morgan Stanley, which reported lower gains and the risk of an impending economic slowdown and stronger-than-expected gains (+11.3% year-on-year) in the S&P 500. the producers price in June.

Shares of JPMorgan fell by 3.5%, Morgan Stanley by 0.4%.

Index futures suggest an open of around 0.2% so far.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index gained 0.66% less than an hour after closing, mainly driven by Fast Retailing’s rise (+8.37%) after the increase in its annual profit forecast and by Nintendo’s (+ 3.08%) in response to the acquisition of an animation studio.

In China, the Shanghai SSE Composite lost 0.39% and the CSI 300 0.32% after the day’s economic data, a decline limited by hopes of new stimulus.

CHANGES

The dollar pauses against other major currencies (+0.03%) in Asian trading after statements from Christopher Waller and James Bullard, but remains just below its 20-year high as of Thursday and still shows a gain of more than 1.5% compared to the previous week.

The euro, which fell to $0.995 during a session on Thursday in response to US producer price data, took the opportunity to recover 0.07% against the greenback at 1.0023.

The Chinese yuan also hit its lowest level in two months after the poor GDP data.

RATE

US Treasury yields fell to 2.9503% for ten-year securities and 3.118% for two-year securities.

While the two-to-ten-year segment of the yield curve remains inverted, the difference between the two maturities has narrowed to just over 17 basis points, from over 27 points at the start of the day on Thursday, the highest level since September 2000 according to data from Refinitiv.

OIL

The oil market is making progress on hopes of less sustained rate hikes in the United States, even as questions about strong demand limit upside potential.

Brent gained 0.78% to $99.87 a barrel and US light crude (West Texas Intermediate, WTI) 0.41% to $96.17.

(Written by Marc Angrand, edited by Matthieu Protard)

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