Break in sight for European equities, PMIs to watch – 04/05/2022 at 09:08



by Laetitia Volga

PARIS (Reuters) – Major European stock markets are expected to open Tuesday without much change, as investors appear to be looking to take a pause pending more information on what the western powers might decide against Russia.

Futures contracts point to a 0.01% increase for the CAC 40 in Paris, a 0.25% decrease for the Dax in Frankfurt and 0.15% for the FTSE in London.

The broad European Stoxx 600 index gained 0.84% ​​and the CAC 40 0.70% on Monday, as the rise in technology stocks took precedence over uncertainties related to the war in Ukraine.

Western countries, citing war crimes committed by Russian forces in Ukraine, are preparing for further sanctions against Moscow, which could lead to a further rise in commodity prices and, consequently, greater pressure on central banks to tackle inflation.

Unsurprisingly, Australia’s central bank kept its key rate at 0.1% on Tuesday, but opened the door for its first rate hike in more than a decade, noting that future inflation data and labor costs will shape its decision-making.

Market participants look forward to the morning release of final March figures for services and composite PMI activity indicators.


The New York Stock Exchange ended Monday, driven by large caps and the rise in Twitter stock (+27%) in the wake of announcing a 9.2% stake in the company.businessman Elon Musk, now the largest shareholder of the social network. [.NFR]

The Dow Jones index gained 0.3% to 34,921.88 points, the S&P 500 gained 0.81% to 4,582.64 points and the Nasdaq Composite rose 1.90% to 14,532.55 points.


The Nikkei on the Tokyo Stock Exchange gained 0.19% at the end of a hesitant session, torn between investor caution on business forecasts with the COVID-19 pandemic and the war in Ukraine and , Monday’s positive session on Wall Street.

Chinese markets are closed for a holiday.


On the treasury side, US Treasury yields fluctuate little, but the two-to-ten-year yield curve segment remains inverted, which is considered a reliable indicator of future recession risks and doubts. †

The 10-year Treasury yield stands at 2.432% and the two-year at 2.4549%, which could narrow the yield differential between the two maturities to -2.47 basis points from -10 the day before.

The German decade has changed little in early trading, at 0.534%.


The euro was flat at $1.0965, close to a week-long low and 1.0959 the day before, impacted by the prospect of additional European sanctions against Russia.

The dollar index, which measures the dollar’s movements against major currencies, is stable.

The Australian dollar (+0.9%) hit a 10-month high against the US dollar as the Reserve Bank of Australia (RBA) withdrew from its pledge to be “patient” with monetary policy tightening .

“We can probably expect a rate hike shortly after the (legal) election in May… The RBA’s delay shows the folly of its stubbornness to be too ‘friendly’ at the start of the year (…) It will We will likely have to act faster and harder to raise interest rates from a sadly low and inadequate 0.1%, increasing the risk of a shock to the economy,” said Michael Hewson of CMC Markets.


Oil prices are soaring as the possibility of new sanctions against Moscow heightens concerns over supply disruptions as nuclear talks with Iran stall.

Brent gained 1.82% to $109.49 a barrel and US light crude (West Texas Intermediate, WTI) rose 1.8% to $105.14.

(edited by Bertrand Boucey)

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