2023-08-18 12:50:46
(Photo: 123RF)
MARKET REVIEWS. Global markets were mostly retreating on Friday, as rising yields on the Wall Street bond market hinted at continued high interest rates in the United States.
Stock market indices at 7:45 a.m.
And Europe, Paris yielded 0.98%, Frankfurt 0,92% et Milan 0,77%.
London fell by 0.91%, following the publication of a decline in retail sales in the United Kingdom of 1.2% in volume in July, more than expected.
Wall Street is heading for a lower open, the futures contract for the Dow Jones fell by 0.19%, the S&P 500 of 0.43% and that of Nasdaq of 0.76%.
In Asia, the Hong Kong Stock Exchange fell 2.05%, weighed down by investor risk aversion following Chinese real estate giant Evergrande filed for bankruptcy in the United States. Shanghai lost 1%.
The context
Since the beginning of the week, the main stock market indices have fallen sharply. The MSCI World index is heading for its worst week since March, when the banking crisis hit.
Investors were surprised by the minutes of the last US Federal Reserve (Fed) meeting, which dashed their hopes that the central bank will not proceed with further rate hikes.
“And as if that weren’t enough,” other data released by the Atlanta Fed on the strength of the U.S. economy “fuels concerns that with such strong growth, U.S. inflation might only take a 180 degree turn and go up,” comments Ipek Ozkardeskaya, analyst at Swissquote Bank.
In response, bond interest rates rose sharply, reaching levels not seen since 2017 for US yields.
At around 7:45 a.m. on Friday, bond market yields erased some of the previous days’ gains, but remained at high levels. The ten-year US government bond rate stood at 4.22%, down from 4.28% at the previous day’s close. In Europe, that of the ten-year German debt was at 2.61% once morest 2.71% on Thursday.
“At the same time, concerns regarding China’s property sector and its weakening economy are mounting,” said Hargreaves Lansdown analyst Sophie Lund-Yates.
Chinese real estate is crumbling
Thursday, the Chinese real estate giant Evergrande (EGRNF)heavily indebted, has requested its placement in the United States under bankruptcy proceedings according to court documents, a measure aimed at protecting its American assets, while a debt restructuring agreement is reached.
The shares of its Hong Kong-listed subsidiaries Evergrande Property Services and Evergrande new energy vehicle fell by 9.09% and 16% respectively in the latest trading.
Country Garden (CTRYY), one of China’s biggest and heavily indebted real estate groups, lost 1.30%. On Wednesday, he warned on Wednesday that “considerable uncertainties” hang over his refunds.
In Paris, Unibail-Rodamco-Westfield (URW.PA) posted the largest drop in the CAC 40 at -2.82%.
On the side of oil, currencies and bitcoin
Oil prices fell slightly on Friday as the market worried regarding demand from China.
Around 7:45 a.m., a barrel of Brent from the North Sea, for delivery in October, lost 0.34% to 83.83 US dollars (US$) and its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in September, fell 0.07% to US$80.33.
On the foreign exchange market, the euro was stable (-0.08%) once morest the dollar at US$1.0863 for one euro. The yen strengthened once morest most other currencies, it took 0.26% to 145.45 yen for one US dollar.
The pound lost ground, following the publication of retail sales, and yielded 0.34% to 1.2704$US for one pound.
Bitcoin fell 4.42% to US$26.420, a victim of investor risk aversion.
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