Pause in sight for European equities, PMIs to watch – 04/05/2022 at 09:08

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EUROPEAN STOCK EXCHANGES EXPECTED DOWN SLIGHTLY

EUROPEAN STOCK EXCHANGES EXPECTED DOWN SLIGHTLY

by Laetitia Volga

PARIS (Reuters) – The main European stock markets are expected to open Tuesday without much change, as investors seem to want to take a break while waiting to learn more about what the Western powers could decide against Russia.

Futures contracts indicate an increase of 0.01% for the CAC 40 in Paris, a decline of 0.25% for the Dax in Frankfurt and 0.15% for the FTSE in London.

The broad European Stoxx 600 index gained 0.84% ​​on Monday and the CAC 40 0.70%, as the rise in technology stocks took precedence over the uncertainties linked to the war in Ukraine.

Western countries, citing war crimes by Russian forces in Ukraine, are preparing to adopt further sanctions against Moscow, which could cause a further spike in commodity prices and consequently increase pressure on central banks to deal with inflation.

On Tuesday, Australia’s central bank unsurprisingly held its key rate at 0.1% but opened the door to its first rate hike in more than a decade, noting that future inflation data and the cost of labor will be decisive in his decision-making.

Market operators will be watching for the publication in the morning of the final figures for the month of March of the services and composite PMI activity indicators.

AT WALL STREET

The New York Stock Exchange ended up on Monday, driven by large caps and the surge in Twitter shares (+ 27%) in the wake of the announcement of a 9.2% stake in the company. businessman Elon Musk, now the largest shareholder of the social network. [.NFR]

The Dow Jones index gained 0.3% to 34,921.88 points, the S&P-500 gained 0.81% to 4,582.64 points and the Nasdaq Composite advanced 1.90% to 14,532.55 points.

IN ASIA

The Nikkei on the Tokyo Stock Exchange gained 0.19% at the end of a hesitant session, torn between, on the one hand, the caution of investors on business forecasts with the COVID-19 pandemic and the war in Ukraine. and, on the other hand, the positive session on Monday on Wall Street.

Chinese markets are closed for a public holiday.

RATE

On the government bond side, US Treasuries yields vary little but the segment of the two-to-ten-year yield curve remains inverted, which is considered a reliable indicator of future recession risks and doubts. investors on developments in the economy and monetary policy.

The yield on ten-year Treasuries stands at 2.432% and that of two years at 2.4549%, which allows the difference in yield between these two maturities to narrow to -2.47 basis points after having brushed -10 the day before.

The German ten-year is little changed in early trading, at 0.534%.

CHANGES

The euro was unchanged at $1.0965, close to a one-week low reached the day before at 1.0959, affected by the prospect of additional European sanctions against Russia.

The dollar index, which measures the fluctuations of the greenback against major currencies, is stable.

The Australian dollar (+0.9%) hit a ten-month high against the US dollar as the Reserve Bank of Australia (RBA) backed away from its pledge to be “patient” on policy tightening monetary.

“We can probably expect a rate hike soon after the May (legislative) election… The RBA’s delay shows the folly of its stubbornness to be too ‘dovish’ at the start of the year (. ..) It will likely have to act faster and harder to raise the rate from a woefully low and inadequate 0.1%, which increases the risks of a shock to the economy,” said Michael Hewson at CMC Markets.

OIL

Oil prices are on the rise as the possibility of new sanctions against Moscow heightens worries about supply disruptions as Iran nuclear talks stall.

Brent gained 1.82% to 109.49 dollars a barrel and American light crude (West Texas Intermediate, WTI) took 1.8% to 105.14 dollars.

(edited by Bertrand Boucey)

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