OPENING IN THE DISORDER IN VIEW IN EUROPE, OIL DROP
by Marc Angrand
PARIS (Archyde.com) – The main European stock markets are expected in dispersed order on Thursday for the last session of the quarter, while oil prices relapse and questions persist over the evolution of the military situation in Ukraine and Russia’s intentions .
Futures contracts on indices suggest a fall of 0.19% for the CAC 40 in Paris but an increase of 0.59% for the Dax in Frankfurt and 0.36% for the EuroStoxx 50 while the FTSE 100 at London should start close to balance.
The Biden administration plans to draw 180 million barrels of oil from US strategic reserves over the next few years, four US sources have learned, in a bid to lower prices at the pump following the surge in recent weeks caused by Russia’s invasion of Ukraine.
This initiative, which might at least temporarily allay fears linked to soaring energy prices on a global scale, temporarily relegates to the background the renewed concern aroused by the military situation in Ukraine, where President Volodimir Zelensky spoke of the risk of a new Russian offensive in the east.
“Investors do not see in the actions a de-escalation of the conflict although positive signals have been sent in recent days”, notes Saxo Bank in its daily note.
Concerns regarding the economic situation might also encourage caution: the official Chinese PMI indices show a contraction in activity in March in both the manufacturing and services sectors, a double decline that had not been observed since February 2020.
In Germany, retail sales increased by only 0.3% in February, while the Archyde.com consensus was expecting an increase of 0.5%.
On the agenda for the day are also, among other things, the first estimate of inflation in France, the figures for income and expenditure of American households and unemployment claims in the United States, on the eve of the monthly report on the use.
This session is the last of a quarter which should end, for the main European indices, with the most marked decline since the start of 2020: the CAC 40 is down 5.75% and the Stoxx 600 is down 5%. .66% since January 1.
OIL
Crude prices are falling once more pending Joe Biden’s announcement of increased use of US strategic reserves.
Brent fell 3.62% to 109.34 dollars a barrel and US light crude (West Texas Intermediate, WTI) fell 5.13% to 102.29 dollars.
The market is also awaiting the conclusions of the OPEC+ meeting scheduled for the day.
A WALL STREET
The New York Stock Exchange ended in the red on Wednesday, with the Dow Jones and the S&P-500 seeing an end to a series of four sessions in the green, amid recent signs of a breakthrough in the talks between Russia and the Ukraine have eased.
The Dow Jones index fell 0.19%, or 65.38 points, to 35,228.81, the Standard & Poor’s 500 lost 29.15 points, or 0.63%, to 4,602.45 and the Nasdaq Composite lost fell 177.36 points (-1.21%) to 14,442.28.
Unlike the day before, the energy sector was the best performing of the main sectors of the S&P-500 with an increase of 1.17%.
Despite rebounding more than 5% in March, the S&P-500 is on course for its first quarterly decline since the start of 2020.
Futures on major indices suggest a slightly higher open for now.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index ended down 0.73% on profit taking before the end of the Japanese fiscal year. It posted a rise of 4.88% in March, its best monthly performance since November 2020, but a decline of 3.37% since the start of the year.
In China, the official PMI figures weigh on the trend: the SSE Composite of Shanghai yields 0.31% and the CSI 300 0.6%.
In Hong Kong, the Hang Seng fell 1.08% with technology stocks, once more affected by fears of a forced withdrawal of several large groups from the American listing. Baidu thus gives up 1.76%.
RATE
Yields on US Treasuries continue the downward movement observed since Monday following the rapid upward phase linked to expectations of a rise in Federal Reserve rates: the ten-year returns to 2.3416% and the two-year to 2.2983 %.
The gap between the two is thus close to four basis points following the brief inversion observed in session on Tuesday, considered as a signal of an increased risk of recession.
The ten-year German fell slightly in early trading to 0.66%.
CHANGES
The euro remains above 1.1150 dollars, the highest in a month, following recovering 1.6% over the last two sessions on hopes of a turning point in the conflict in Ukraine.
The renewed strength of the single currency does not prevent the “dollar index”, which measures the fluctuations of the greenback once morest a reference basket, from progressing by 0.04%. The latter posted a gain of around 2% over the first quarter as a whole.
(edited by Nicolas Delame)