EXPECTED INCREASE IN EUROPE
PARIS (Reuters) – Major European stock markets are expected to gain as they open Thursday in the wake of Wall Street and Asian markets and awaiting statements from the European Central Bank (ECB), as US bond yields continue to fall.
The first available indications point to an increase of 0.58% for the Paris CAC 40, 0.68% for the Dax in Frankfurt, 0.21% for the FTSE in London and 0.69% for the EuroStoxx 50.
Some corporate earnings, including those of the luxury group Hermès, will determine the rating until the ECB meeting, whose monetary policy statement will drop at 11:45 GMT and will be followed 45 minutes later by the press conference of the institution’s president, Christine. Lagarde.
With strong concerns over record inflation in the eurozone, the institution could present a clearer timetable for withdrawing its stimulus measures, some analysts say.
“Given the high uncertainties, the ECB will probably want to remain flexible (…) However, the restrictive tone is likely to increase, leaving no doubt that the most likely outcome in the coming months is an end to net asset purchases and then higher policy rates,” says Nick Kounis, economist at ABN Amro.
Canada’s central bank and New Zealand’s central bank raised interest rates by 50 basis points on Wednesday, the highest in more than 20 years, amid rising price inflation. markets.
VALUES TO FOLLOW:
AT WALL STREET
The New York Stock Exchange ended sharply higher on Wednesday as interest-rate-sensitive growth stocks rebounded as investors processed stronger-than-expected rise in producer prices and early corporate earnings.
The Dow Jones index gained 1.01% to 34,564.59 points, the S&P 500 gained 1.12% to 4,446.59 and the Nasdaq Composite rose 2.03% to 13,643.59 points.
JPMorgan was down 3.2% after a 42% decline in profits for the January-March period due to a decline in trading revenues and an unfavorable geopolitical context for transactions.
In contrast, airline Delta beat expectations in the first quarter, saying it expects a return to earnings in the current quarter based on “historically strong” demand, leading to a 6.2% increase in its shares.
Ahead of the Easter long weekend, earnings season continues this Thursday with several major banks including Morgan Stanley, Citigroup, Goldman Sachs and Wells Fargo.
Futures contracts are currently pointing to a slightly higher session.
IN ASIA
The Nikkei on the Tokyo Stock Exchange gained 1.22% in the wake of Wall Street, led by technology stocks and travel-related stocks.
In China, the Shanghai Composite index rose 1.09% and the large-cap CSI 300 rose 1.07% after the country’s authorities announced that they will use certain instruments to support the economy in due course.
“It is highly likely that the People’s Bank of China will cut the reserve requirement ratio for most banks by 50 basis points in the coming days,” Nomura said in a note.
“These monetary measures and other decisions are likely to have little positive impact. In our view, adjusting the ‘zero COVID’ strategy is the key to a resumption of growth,” added the Bank of Japan.
In Seoul, the Kospi is stabilizing after briefly losing ground after South Korea’s central bank raised its key rate to 1.5%, the highest level since August 2019 in the face of inflation.
RATE
In the bond market, government bond yields continue to decline slightly after the release of consumer price data on Tuesday, which raised hopes that rising inflation may have peaked.
However, the stronger-than-expected rise in producer prices in the United States calls for caution.
The ten-year comes in at 2.6749% and holds its decline for three days to over ten basis points.
CHANGES
In the wake of a nearly two-year high, the dollar fell below 100 against a basket of international currencies as US bond yields halted their advance.
The yen benefited, returning to the dollar’s 125.32 after falling to its lowest level against the greenback since May 2002 at 126.31. The euro gained 0.24% to $1.0911.
OIL
The oil price has fallen slightly after gaining almost 4% the day before. Brent fell 0.29% to $108.46 a barrel and US light crude (West Texas Intermediate, WTI) 0.67% to $103.55.
(edited by Matthieu Protard)
