Stocks expected to rise, the ECB and results to follow – 04/14/2022 at 08:20

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EXPECTED INCREASE IN EUROPE

PARIS (Reuters) – The main European stock markets are expected to rise on Thursday at the open in the wake of Wall Street and Asian markets and pending statements from the European Central Bank (ECB) while U.S. bond yields continue to decline. .

The first indications available indicate an increase of 0.58% for the Parisian CAC 40, 0.68% for the Dax in Frankfurt, 0.21% for the FTSE in London and 0.69% for the EuroStoxx 50 .

A few company results, including those of the luxury group Hermès, will drive the rating until the ECB meeting, whose monetary policy statement will fall at 11:45 GMT and will be followed 45 minutes later by the press conference of the President of the institution, Christine Lagarde.

With the strong concerns linked to record inflation in the euro zone, the institution could present a clearer timetable for the withdrawal of its stimulus measures, say some analysts.

“Given the high uncertainties, the ECB is likely to want to remain flexible (…) However, the restrictive tone is likely to intensify, leaving no doubt that the most likely outcome in the coming months is an end to the net asset purchases and subsequently higher policy rates,” said Nick Kounis, economist at ABN Amro.

Canada’s central bank and New Zealand’s central bank hiked rates by 50 basis points on Wednesday, the most in more than 20 years, in the face of soaring price inflation, while South Korea’s bank raised also tightened its monetary policy on Thursday to the surprise of the markets.

VALUES TO FOLLOW:

AT WALL STREET

The New York Stock Exchange ended sharply higher on Wednesday as interest-rate-sensitive growth stocks rebounded as investors digested a stronger-than-expected rise in producer prices and early business results.

The Dow Jones index gained 1.01% to 34,564.59 points, the S&P-500 gained 1.12% to 4,446.59 points and the Nasdaq Composite rose 2.03% to 13,643.59 points.

JPMorgan fell 3.2% after posting a 42% drop in profit over the January-March period due to a decline in trading revenues and an unfavorable geopolitical context for transactions.

Conversely, airline Delta beat expectations in the first quarter and says it expects a return to profit in the current quarter on “historically strong” demand, prompting a 6.2% jump in its stock. .

Ahead of the long Easter weekend, the earnings season will continue this Thursday with several major banks including Morgan Stanley, Citigroup, Goldman Sachs and Wells Fargo.

Futures contracts are foreshadowing a slightly higher session for the time being.

IN ASIA

The Nikkei on the Tokyo Stock Exchange took 1.22% in the wake of Wall Street, led by technology stocks and those related to travel.

In China, the Shanghai Composite index advanced 1.09% and the large-cap CSI 300 1.07% after the country’s authorities announced that they will in due course use certain instruments to support the economy.

“The People’s Bank of China is very likely to cut the reserve requirement ratio by 50 basis points for most banks in the coming days,” Nomura said in a note.

“These monetary measures and other decisions are likely to have little positive impact. In our view, the adjustment of the ‘zero COVID’ strategy is the key to a resumption of growth,” added the Japanese bank.

In Seoul, the Kospi is stabilizing after briefly losing ground after South Korea’s central bank raised its key rate to 1.5%, its highest level since August 2019, in the face of inflation.

RATE

In the bond market, treasury yields continue to fall slightly after Tuesday’s release of consumer price data that raised hopes the rise in inflation may have peaked.

However, the stronger-than-expected rise in producer prices in the United States calls for caution.

The ten-year appears at 2.6749% and bears its decline for three days to more than ten basis points.

CHANGES

In the aftermath of a nearly two-year high, the dollar retreated below 100 against a basket of international currencies as US bond yields halted their advance.

The yen took advantage and returned to 125.32 to the dollar after falling Wednesday to its lowest level against the greenback since May 2002 at 126.31. The euro gained 0.24% to 1.0911 dollars.

OIL

Oil prices are slightly down after having taken almost 4% the day before. Brent fell 0.29% to 108.46 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.67% to 103.55 dollars.

(edited by Matthieu Protard)

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