EUROPE EXPECTED IN DISPERSED ORDER
by Laetitia Volga
PARIS (Archyde.com) – The Paris Stock Exchange and that of Frankfurt are expected to be slightly lower on Tuesday at the opening the day after the more restrictive tone adopted by the Chairman of the Federal Reserve (Fed) while the Footsie 100 in London could stand out , like Monday’s session, thanks to the rise in oil values with the rise in crude prices.
The first indications available suggest an opening down 0.33% for the Paris CAC 40, 0.22% for the Dax in Frankfurt and up 0.07% for the FTSE in London.
Speaking to the National Association of Business Economics (NABE), Fed Chairman Jerome Powell said bigger than usual rate hikes could be put in place by the institution if needed to counter a sustained acceleration in inflation.
These statements, made Monday at the time of the European closing, could fuel the climate of uncertainty linked to the economic situation and Russia’s offensive in Ukraine.
The lack of progress in the peace negotiations between the two countries and the possibility of new Western sanctions against the Russian energy sector raise fears of a surge in inflation and a sharp slowdown in the economic recovery, or even a recession in Europe said Clifford Bennett, chief economist at ACY Securities.
“Europe is likely to enter a recession and, as energy and food prices remain high, the poorest will be disproportionately affected. A rise in interest rates will have no impact on this inflationary wave due to to war,” he said.
A WALL STREET
The New York Stock Exchange ended lower on Monday as its main indices extended their decline during the session following comments from the Federal Reserve Chairman.
The Dow Jones index fell 0.58% to 34,552.99 points, the S&P-500 lost 0.04% to 4,461.18 points and the Nasdaq Composite fell 0.40% to 13,838.46 points.
On the stock side, Boeing fell 3.6% after one of its 737-800 aircraft, operated by China Eastern Airlines, crashed in southern China, reportedly killing all people on board.
Futures point to a slightly lower session.
IN ASIA
The Tokyo Stock Exchange gained 1.48%, driven by the progress of the energy sector and financial stocks thanks to the rise in oil prices and bond yields respectively.
In China, the CSI300 index of large caps lost 0.22% while the Hong Kong Hang Seng gained 1.81%, supported by Alibaba (+8.17%) which increased its share buyback program. shares at $25 billion, a record amount for the e-commerce giant.
CHANGES
The dollar appreciates in the wake of Jerome Powell’s comments which opened the door to a more aggressive monetary policy from the US central bank.
The greenback is up 0.34% against a basket of major currencies and 0.74% against the yen alone, which hit a six-year low of 120.46 to the dollar.
“The strengthening monetary policy divergence between the Fed and the Bank of Japan (BoJ) amplifies the undervaluation of the yen against the dollar,” said Lee Hardman, analyst at MUFG.
The euro lost 0.27% to 1.0984 dollars.
RATE
Like the dollar, US bond yields are on the rise, the ten-year one reached its highest level since May 2019, at 2.3460% before returning to 2.3315%.
Markets anticipate more than 60% a rate cut of 50 basis points on May 4 followed by another in June, indicates the CME Group’s FedWatch barometer.
OIL
Oil is on the rise while the member countries of the European Union appear divided on the establishment of sanctions on Russian oil.
“The proposed embargo is still far from materializing as a significant number of EU countries oppose it. Nevertheless, their talk about it is a significant change,” wrote analysts at Commonwealth Bank of Australia. in a note.
US light crude (West Texas Intermediate, WTI) gained 2.48% to $114.9 and Brent was up 3.02% to $119.11.
NO MAJOR ECONOMIC INDICATOR ON THE AGENDA FOR MARCH 22
(edited by Nicolas Delame)