EUROPEAN SCHOLARSHIPS STRENGTHEN THEIR PROGRESS HALF SESSION
by Marc Angran
PARIS (Reuters) – Wall Street is expected to rise and European stock markets strengthened their advances midway through Tuesday’s session, continuing an uptick based mainly on hopes for progress in Ukraine-Russia talks.
Futures contracts on New York’s major indices point to gains of 0.41% for the Dow Jones, 0.43% for the Standard & Poor’s 500 and 0.39% for the Nasdaq.
In Paris, the CAC 40 gained 2.71% to 6767.96 points around 10:45 GMT, the highest since February 23, the day before the Russian army entered Ukraine. In London, the FTSE 100 gains 1.31% and in Frankfurt the Dax is up 2.14%.
The EuroStoxx 50 index is up 2.57%, the FTSEurofirst 300 by 1.5% and the Stoxx 600 by 1.62%, its highest point since Feb. 21.
Negotiations between Russians and Ukrainians in Istanbul are highly unlikely to resolve the conflict, but investors hope they will at least allow for a temporary ceasefire that will allow for evacuations .
Hope takes precedence over concerns about the impact of the conflict on the economy and business, illustrated Tuesday by the more pronounced deterioration than expected in household morale in Germany and France.
The session on Wall Street will be animated by, among other things, the results of the Conference Board’s monthly survey of consumer confidence and United States job openings data (JOLTS).
At the same time, expectations of monetary policy tightening and associated risks continue to dictate the trend in bond markets on both sides of the Atlantic.
The 10-year US yield, if below its peak on Monday (2.557%), is up 2.8 basis points to 2.5049%, while the two-year yield rises more than three points to 2.419%. This part of the yield curve is therefore approaching a new inversion.
“U.S. fixed income markets illustrate mounting fears of an economic slowdown or recession,” UBS Global Wealth Management strategists explained in their daily note. “But despite these bond signals, we see reason to be optimistic about the ability of the US economy to weather rising interest rates.”
In Europe, the German biennial value is at -0.019% at its highest point since December 2014 and the French equivalent has turned positive for the first time since January 2015.
VALUES IN EUROPE
All major sectors of the European rating are rising at noon, with the strongest gains benefiting the automotive (+3.65%) and distribution (+2.39%) sub-funds.
Banks (+2.10%) continued to benefit from the upward movement in bond yields, which in general helped improve their credit margins.
In Paris, Société Generale wins 4.6% and BNP Paribas 3.7%.
Down, Sanofi lost 0.71%, the only decline in the CAC 40 with Thales (-3.1%), after raising the sales forecast for Dupixent, one of its flagship products, to 13 billion euros a year, a level seen by analysts considered disappointing.
Hopes for talks between Ukraine and Russia are boosting the euro, which appreciated 0.68% against the dollar to 1.1053, its eight-day high.
The greenback fell 0.4% against a benchmark basket.
The pound fell to its lowest level in two weeks after statements by Bank of England governor Andrew Bailey on Monday reaffirmed the institution’s cautious stance by highlighting signs of a slowing economy.
The oil market, which exacerbated the decline caused by the containment in Shanghai early in the day, has started to rally again, with concerns about the fallout from the war in Ukraine regaining the upper hand.
Brent gained 1.51% to $114.18 a barrel and US light crude (West Texas Intermediate, WTI) 1.21% to $107.24.
Two major oil fields in Kazakhstan have cut production since Sunday, according to two sources.
(Written by Marc Angrand, edited by Jean-Stéphane Brosse)