RISE IN VIEW IN EUROPE AFTER WALL STREET, THE FED IS SOMEWHAT REASSURING
by Marc Angrand
PARIS (Archyde.com) – The main European stock markets are expected to rise on Tuesday and should benefit from the momentum given by Wall Street, which ended up sharply following statements deemed generally reassuring by Federal Reserve officials on the expected rise in rates of interest.
Index futures suggest a rise of 0.55% for the CAC 40 in Paris, 1.08% for the Dax in Frankfurt, 0.73% for the FTSE 100 in London and 1.3% for the EuroStoxx 50.
The Parisian index fell 2.35% over the whole of January and the broad European Stoxx 600 index 3.88%, its worst monthly performance since October 2020.
February should start on a more positive tone thanks to the good performance of American equities on Monday, led by technology, following the declarations of several leaders of the Fed, who confirmed that they were considering a rate hike in March but maintained the vagueness for the future. uncertainties regarding inflation and the impact of the pandemic.
“We are indeed on the way to a rise in March,” said, for example, the president of the San Francisco Fed, Mary Daly. “But following that, I want to see what the data tells us… Let’s wait until we get past Omicron, let’s wait for that and we’ll see.”
This speech might interrupt the upward revision of rate expectations observed in recent days, which has led some economists to expect five, six or even seven rate hikes from the Fed by the end of the year.
At the same time, pending the decisions of the Bank of England and the European Central Bank (ECB) on Thursday, investors also note that the RBA, the Australian central bank, has ended its purchases of securities on the markets but does not showed no rush to raise its key rate, still set at 0.1%, its all-time low.
The day’s session will also be animated by the final results of the IHS Markit PMI surveys in the manufacturing sector and by the ISM for the sector in the United States.
A WALL STREET
The New York Stock Exchange ended up on Monday thanks to the rebound in technology stocks, which prevented the Nasdaq from recording the worst performance in its history for a month of January.
The Dow Jones index gained 1.17%, or 406.39 points, to 35,131.86 points, the Standard & Poor’s 500 gained 83.7 points (+1.89%), to 4,515.55 and the Nasdaq Composite advanced 469.31 points (+3.41%, its best percentage session since last March) to 14,239.88.
The latter thus reduces its monthly decline to 8.99%, its worst month of January since 2008. The S&P-500 lost 5.26% in one month and the Dow Jones 3.32%.
Among the day’s standout gains, Tesla jumped 10.7% following Credit Suisse’s rating was raised to “outperform” and Boeing gained 5.1% following a large order from Qatar Airways.
Futures so far suggest an open down regarding 0.2%.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index gained 0.28%, its third positive performance in a row, benefiting from the momentum given by Wall Street and optimism on the results of Japanese companies.
Sony ended up slightly (+0.39%) following the announcement of the acquisition of the American video game publisher Bungie for 3.6 billion dollars, its first response to the acquisition of Activision Blizzard by Microsoft.
In China, markets are closed for Lunar New Year celebrations.
The Sydney Stock Exchange takes 0.49% following the RBA’s decision.
EXCHANGES/RATES
The dollar fluctuated once morest the other major currencies (+0.01%) the day following its biggest drop in nearly three weeks (-0.75%) following statements by Fed leaders.
The euro is trading around 1.1240 dollars.
The Australian dollar has almost returned to equilibrium (+0.04%) following having initially lost ground in reaction to the announcements of the RBA.
On the bond market, the yield on ten-year US Treasury bills was stable at 1.7732% and the two-year rate was up very slightly at 1.1711%. The latter took 45 basis points over the whole of January, its largest monthly increase since January 2009.
In Europe, the ten-year German Bund yield, which jumped nearly five points on Monday following Germany’s monthly inflation figures, is down slightly in early trade at 0.004%.
OIL
The oil market is trending up, not far from the seven-year highs reached last week, on the eve of the “OPEC +” meeting, which should confirm its strategy of limited increase in global supply in the face of as demand continues to recover.
Brent gained 0.3% to 89.53 dollars a barrel and American light crude (West Texas Intermediate, WTI) took 0.31% to 88.42 dollars.
They gained 17.6% and 17.2% respectively in January.
(edited by Blandine Hénault)
