EUROPEAN STOCK EXCHANGES EXPECTED ON THE RISE
by Marc Angrand
PARIS (Archyde.com) – The main stock markets in the euro zone are expected to rise on Tuesday following Wall Street’s positive closing, which might allow them to regain some of the ground lost the day before even if the wait for decisions from the Federal Reserve is likely to limit risk-taking until their announcement on Wednesday.
Futures contracts on indices suggest an increase of 0.49% for the CAC 40 in Paris, 0.91% for the Dax in Frankfurt and 1.01% for the EuroStoxx 50, while in London, where markets were closed on Monday, the FTSE 100 is expected to fall 0.84%.
The FOMC, the Fed’s monetary policy committee, is due to begin its deliberations at 2:00 p.m. GMT; the markets are still anticipating a half-point increase in the federal funds rate target (“fed funds”) following the quarter-point increase decided in March. But the real issue of Wednesday’s announcements will be the discourse that the central bank and its president, Jerome Powell, will have on the pace of the next rate hikes and the reduction of the balance sheet.
As a prelude to this key meeting for all the markets, the Australian central bank announced a 25 basis point increase in its key rate to 0.35%, its first increase in more than ten years, and hinted that it would continue its momentum in the months to come.
In Europe, the upcoming session will be mainly driven by the publication of results, starting with those of BNP Paribas, the leading listed bank in Europe, whose quarterly net profit rose by 19.2% in one year. The oil company BP for its part published its best quarterly current profit for more than ten years but also announced exceptional charges of 24 billion dollars linked to its exit from Russia.
Also on the agenda are, among other things, the quarterly publications of Pfizer in the United States.
A WALL STREET
The New York Stock Exchange ended higher on Monday following a yo-yo session, between rebounding following its heavy fall on Friday and cautious investors ahead of this week’s meeting of the Federal Reserve, which is expected to decide on further monetary tightening to curb inflation.
The Dow Jones index gained 0.26%, or 84.29 points, to 33,061.5, the Standard & Poor’s 500 gained 23.46 points (+0.57%) to 4,155.39 and the Nasdaq Composite rose 201.38 points (+1.63%) to 12,536.02.
Twitter (+0.3%) turned higher following reports from Archyde.com that Elon Musk would seek investors to help fund his takeover of the social network.
Amazon, which had fallen 14% on Friday following its disappointing results and forecasts, ended on the wire in the green (+0.17%), following having lost up to almost 3% in session, at its lowest level for nearly two years.
Futures on major indices suggest a slightly higher open for now.
IN ASIA
Markets are closed in Japan and mainland China, as the day is a public holiday in both countries.
In Hong Kong, the Hang Seng index, down at the start of the session, now climbs 0.12%. Alibaba drops 0.59% following dropping as much as 9% in response to a news report regarding the arrest of a man nicknamed ‘Ma’, as the stock only cut losses following the article was edited to clarify that the individual was not the founder of the group.
HSBC gains 1.65% following reports that its largest shareholder, insurer Ping An, wants to open a discussion on a possible split.
EXCHANGES/RATES
The dollar lost some ground once morest other major currencies (-0.16%) but remained close to recent 20-year highs before the start of the Fed’s two-day meeting.
The euro is hovering around the $1.05 threshold.
In the US bond market, the yield on ten-year Treasury bills hit 3% on Monday for the first time since December 2018.
European yields rose slightly in early trading, to 0.97% for the ten-year German Bund and 1.491% for the French OAT of the same maturity.
OIL
Rising at the start of the day, the oil market is now practically stable, despite the prospect of an agreement between the member countries of the European Union to toughen the sanctions once morest Russia, including on the energy side.
Brent fell 0.08% to $107.49 a barrel and US light crude (West Texas Intermediate, WTI) 0.07% to $105.10.
METALS
Copper and aluminum prices fell to their lowest level in three months in London, the continuation of health restrictions in China and the prospect of another hike in US interest rates fueling fears for demand.
The futures price of copper fell to 9,546 dollars per ton, the lowest since January 31, that of aluminum to 3,008 dollars, its lowest level since February 3.
(Written by Marc Angrand)
