European Stock Markets Rebound: Dollar at a Peak Against Onshore Yuan Since 2007

2023-09-07 14:54:49

Shanghai was falling. London, Tokyo and Paris were progressing. Oil prices were rising. (Photo: The Canadian Press)

MARKET REVIEWS. European stock markets took advantage of a small lull in rates on Thursday to rebound a little, while the dollar remained at a high level, even reaching a peak once morest the onshore yuan since 2007.

Stock indices at 8:00 a.m.

European financial markets are progressing following an opening in the red. Around 7 a.m., Milan advanced by 0.02%, Frankfurt of 0.04%, Paris of 0.30% and London of 0.33%.

European government interest rates fell a little on the bond market, following having risen sharply in recent sessions.

US indices are expected to open lower on Thursday according to futures, up to -0.6% for the Nasdaq. By Wednesday, they had all backed down.

In New York, before the opening of the markets, the Dow Jones average of industrial values ​​fell by 0.1% and the broader S&P 500 index by 0.4%.

In Asia, the Stock Exchange Hong Kong lost 1.34%, Shanghai 1,13% et Tokyo fell 0.75%, snapping a streak of eight consecutive gains.

Sydney fell 1.2% and Seoul 0.6%.

The DAX German lost 0.2% and the FTSE 100 British 0.1% at the start of the session in Europe. THE CAC 40 French was stable.

The context

China’s exports contracted in August for the fourth straight month, the latest sign in a long string of indicators pointing to a slowdown in the world’s second-largest economy, although the government is still resisting the idea of ​​a recovery plan. RELAUNCH.

Consequently, the onshore yuan, whose exchanges are supervised by Beijing, fell Thursday to its lowest level since December 2007 once morest the dollar, at 7.3284 yuan for one American dollar (US$). Around 7:00 a.m., it fell 0.14% once morest the US dollar to 7.3288 yuan.

“The contrast between improving economic momentum in the United States and weakening growth momentum in China and Europe has been a significant driver” for the current dollar appreciation, says MUFG analyst Lee Hardman. .

In the United States, the economic outlook is even so good that it is becoming “uncomfortable” for investors according to Ipek Ozkardeskaya, analyst at Swissquote: the ISM services indicator on Wednesday remained at a solid level, and the price component has rose more than expected, rekindling fears that it will then translate into a further run-up in prices.

This trend can also be seen in other currencies, such as the euro. It was still down 0.18% once morest the US dollar at US$1.0707 per euro around 6:55 a.m., the lowest since June. Since mid-July, the European currency has melted by more than 4% once morest the greenback, a significant movement for the foreign exchange market.

On the economic indicator side on Thursday, the growth of gross domestic product in the euro zone was revised down in the second quarter to +0.1%, according to new figures from Eurostat which had so far announced an increase of 0.3%. . At the same time, the estimate for the first quarter has been revised upwards, to +0.1%, once morest zero growth previously.

Industrial production in Germany, for its part, plunged in July for the third consecutive month, once morest a backdrop of high energy costs and sluggish demand for the sector which have weighed on Europe’s largest economy for several months.

Insurance convinces

The British insurer Direct Line Insurance (DLG.L) soared more than 16% in London despite the announcement of a half-year loss of almost 52 million pounds, driven by the sale of its commercial insurance brokerage business for more than half a billion pounds and prospects for improved results next year.

In Paris, the reinsurer Scor (+3,57%) unveiled a long-awaited strategic plan to increase its “economic value”. In Milan, General Insurance (GM.XD) also rose by 2%.

Oil catches its breath

Oil prices fell slightly on Thursday — following their good the previous days — weighed down by a disappointing new economic indicator coming out of China which is rekindling concerns regarding the country’s demand.

The baril de Brent de more you Nord was trading around US$90.14 (-0.51%) around 06:45, and the American WTI around US$87.02 (-0.60%).

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