2023-06-12 17:17:29
(Photo: The Canadian Press)
MARKET REVIEWS. World stock markets are confident on Monday pending announcements from the US and European central banks, while the Federal Reserve may not raise its key rate, a first since March 2022.
Wall Street is heading for a contrasting open. Around 7:35 a.m. GMT, the Dow Jones futures contract took 0.06%, that of the S&P 500 0.05% while that of the Nasdaq fell by 0.15%.
Stock market indices at 7:45 a.m.
European markets were up on Monday morning following a mixed session in Asia as investors awaited the Federal Reserve’s decision on its key rate.
London added 0.2% in early trading in Europe, while Frankfurt et Paris took regarding 1%.
In New York, before the opening of the markets, the Dow Jones Average of industrial stocks rose by 0.2% and the broader index S&P 500 of 0.4%.
In Asia, the Nikkei 225 added 0.5% in Tokyo. The scholarship of Shanghai fell 0.1% and the Hang Seng added the same margin in Hong Kong. Seoul lost 0.5%. The Australian Stock Exchange was closed for a holiday.
On the New York Commodity Exchange, the price of oil dropped US$1.97 to US$68.20 a barrel.
The context
European stock market indices rose modestly: +0.69% in Paris, +0.15% in London, +0.75% in Frankfurt, +0.68% in Milan. The Tokyo Stock Exchange experienced similar variations and Hong Kong and Shanghai ended almost flat.
Wall Street is heading for an opening slightly higher too, by 0.13% for the Dow Jones and 0.50% for the Nasdaq.
The bond market was also not very lively, interest rates on sovereign debt stagnated, at 2.36% for the German 10-year bond and 3.75% for the American equivalent.
All investors’ attention is on the meeting of the American Federal Reserve (Fed) on Tuesday and Wednesday and that of the European Central Bank (ECB) on Thursday.
The latest consumer price index figures for May in the United States will be scrutinized on Tuesday, in order to gauge the current price dynamics, with inflation still remaining strong in the world’s largest economy.
“If there are no major surprises on the inflation data front, the Federal Reserve should keep interest rates unchanged at this week’s monetary policy meeting,” said analyst Ipek Ozkardeskaya. Swissquote Bank.
However, even if no new increase in the Fed’s key rates is announced this week, several economists are warning that the monetary institution might raise them once more at the next meeting, at the end of July.
For Neil Wilson, analyst at Finalto, the Fed does not want to let the market think that rate cuts will occur soon, and the president of the institution Jerome Powell will have to “hold a strong language” to counter these hopes.
As for the ECB, it started its rate hike cycle later than the Fed and therefore still has “some way to go”, according to its president Christine Lagarde.
The ECB should therefore raise its interest rates once more, while signaling that it does not intend to stop there, even if inflation is falling and the euro zone has entered a recession.
The Bank of Japan is also meeting this week, Friday, and should keep its key rates negative despite an acceleration in inflation.
Glencore persists
The Swiss raw materials giant Glencore (+0.44% in London) confirmed on Monday that it had made an offer to take over the coal activities of Teck Resources, a proposal that the Canadian group says it is studying “among others”.
Estate in question
A few minutes following the announcement of the death of the former head of the Italian government Silvio Berlusconi, the title of his group MediaForEurope (MFE, ex-Mediaset) jumped. Around 7:45 a.m., it rose by 3.12% on the Milan Stock Exchange, once morest a backdrop of speculation on the future of Mr. Berlusconi’s empire and possible share sales planned by his heirs.
Interest rates on Italian government bonds fell slightly, slightly more than the rest of European rates. That of the ten-year debt was worth 4.05%, once morest 4.11% at the close on Friday.
Novartis has strong backs
The Swiss pharmaceutical giant Novartis (+0.98% in Zurich) is strengthening in kidney disease by buying the American Chinook Therapeutics for a sum of up to 3.5 billion dollars (3.2 billion euros).
On the side of oil and currencies
Oil prices are faltering as investors fear that a possible Fed interest rate hike will weigh on economic activity and therefore demand for crude.
Around 7:45 am, a barrel of Brent from the North Sea, for delivery in August, lost 2.07% to 73.24 dollars. Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in July, yielded 2.42% to 68.47 dollars.
On the currency side, the euro gained 0.18% once morest the dollar, to 1.0768 dollar for one euro.
Bitcoin lost 0.66% to $25,960.
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