Stocks fall ahead of US inflation – 04/12/2022 at 07:40



by Laetitia Volga

PARIS (Reuters) – Major European stock markets are expected to fall on opening Tuesday and government bond yields continue to rise on fears of runaway inflation that could lead to further monetary tightening in the United States.

The first available indications point to a decline of 0.93% for the Paris CAC 40, 1.15% for the Dax in Frankfurt, 0.74% for the FTSE in London and 1.01% for the EuroStoxx 50.

The inflation theme is key as the release of monthly consumer price data in the United States approaches (12:30 GMT), a further acceleration of which could confirm the Federal Reserve in a more pronounced-than-expected monetary tightening scenario.

The Reuters consensus expects consumer prices in the United States to rise 8.4% year-on-year in March, which would be the index’s largest rise since January 1982.

“We’ve been quite aggressive in terms of rate hikes in the US and we think it’s not just the magnitude of the monetary tightening but the pace of it that will affect investors,” Elizabeth Tian told Reuters, Citigroup’s chief of bond management. sydney.

“Stock markets have been very strong… but we expect the Fed meeting in May to result in an announcement about easing easing and that’s when we could see volatility in stocks building up,” she added. .


The New York Stock Exchange ended lower Monday as the continued rise in bond yields weighed on major growth stocks.

The Dow Jones index fell 1.19% to 34,308.08 points, the S&P 500 lost 1.68% to 4,412.83 points and the Nasdaq Composite fell 2.18% to 13,411.96 points.

Futures currently suggest a 0.4% drop at opening.


On the Tokyo Stock Exchange, the Nikkei fell 1.87% to a four-week low as technology stocks, index heavyweights, fell in the wake of the negative session on Wall Street.

Koichi Kurose, chief strategist at Resona Asset Management, pointed out that concerns about China’s COVID-19 lockdown and rising commodity prices also impacted the trend.

In China, the large-cap CSI 300 and the Shanghai SSE index lost 0.48% and 0.76% respectively due to the health situation in the country, where the number of new cases of infection from the SARS-CoV coronavirus -2 rose to 1,272 on Monday, 88 more cases than the previous day.


In the bond market, the 10-year Treasury yield rose nearly four basis points to 2.8243% after reaching its highest level since December 2018 of 2.8360%.


Variations in the foreign exchange market have been limited, with the dollar gaining 0.09% against a basket of reference currencies for the ninth session of consecutive gains on expectations of a Fed rate hike.

The euro lost some ground, around $1.0875, after being supported the day before by the results of the first round of the presidential election in France.


Oil prices rose, wiping out some of the previous day’s losses as the market weighed in on the possibility of sanctions against the Russian energy sector and OPEC warned it would not be able to offset the loss of Russian crude.

Brent gained 1.66% to $100.11 a barrel and US light crude (West Texas Intermediate, WTI) gained 1.79% to $95.98.

On Monday, they both lost about 4% amid demand fears with China’s health crisis.

(Laetitia Volga, edited by Bertrand Boucey)

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