Rise in sight in Europe, Wall Street has limited its decline – 06/10/2022 at 08:45


View of the Palais Brongniart, the former Paris Stock Exchange

PARIS (Reuters) – Major European stock markets are expected to rise on Thursday on the prospect of a recovery on Wall Street the day after a limited decline amid fresh clues about the state of the economy in the United States.

Futures contracts on indices point to increases of 0.94% for the CAC 40 in Paris, 0.97% for the Dax in Frankfurt, 0.59% for the FTSE 100 in London and 1.02% for the EuroStoxx 50.

Questions about the economic slowdown and the magnitude of future rate hikes remain at the heart of investor decisions, but Wednesday’s session showed their sentiment remained choppy as optimism gave way to worries over an ISM services index earlier in the week in the United States slightly above consensus.

Comments from San Francisco Federal Reserve Chair Mary Daly underscoring the central bank’s determination to lower inflation also weighed on the trend.

After Wall Street closed, his Atlanta counterpart, Raphael Bostic, said the fight against inflation was “still in its infancy.”

While waiting for Friday’s monthly employment report in the United States, the upcoming session will be livened up by, among other things, Euro-zone retail sales statistics (at 09:00 GMT) and the release of the October minutes of the European Central Bank meeting (at 11 :30 GMT) and the United States unemployment claims figures (at 12:30 GMT).

In Germany, industrial orders fell 2.4% in August, a sharper-than-expected fall.

ON WALL STREET

The New York Stock Exchange ended in the red on Wednesday, the recession risks and the prospect of further increases in interest rates have regained the upper hand after a start to the week marked by significantly increased risk appetite.

However, thanks to cheap buying, the decline moderated towards the end of the session, with the three indices even briefly moving into positive territory.

The Dow Jones Index fell 0.14%, or 42.45 points, to 30,273.87 points, the Standard & Poor’s 500 fell 7.65 points, or 0.20%, to 3,783.28 and the Nasdaq Composite fell 27.77 points (-0.25%) to 11,148.64.

Meanwhile, Twitter (-1.30%) marked the period after gaining 22% on Tuesday following the relaunch of Elon Musk’s $44 billion takeover bid. Tesla, led by the billionaire, lost 3.45%.

Index futures to date signal an open of 0.3% for the Dow Jones, 0.32% for the Standard & Poor’s 500 and 0.44% for the Nasdaq.

IN ASIA

In Tokyo, the Nikkei index rose 0.7%, its fourth straight recovery session, and posted its best close since September 20, driven by energy and semiconductor stocks.

The markets in China remain closed and will not reopen until Monday.

EVALUATION

Government bond yields are little changed in Asian trading after rebounding on Wednesday, helped by the day’s US indicators.

The 10-year bond, which recovered almost 14 basis points during the session, is shown at 3.7491% and the 2-year bond is shown at 4.1459%.

In Europe, the 10-year bond rebounded to 2.022% in early trade, erasing a small portion of its gain from the previous day.

CHANGES

The dollar, hesitant since the start of the day, is currently in a downward trend against the other major currencies (-0.14%) after benefiting from the US economic indicators released on Wednesday and comments from the Fed’s leadership.

It’s hovering around 4% below the 20-year high hit last week.

The yen is virtually stable but the euro is regaining ground against the greenback (+0.25%) at 0.9907.

Sterling (-0.03%) was not hurt by Fitch’s decision to downgrade its outlook on the UK sovereign rating to negative from stable five days after a similar decision by S&P Global.

OIL

Oil prices are stabilizing after three straight bull sessions that have seen Brent crude recover to mid-September levels after OPEC+ countries agreed to cut overall production by around two million barrels a day from next month.

Brent fell 0.06% to $93.31 a barrel and US light oil (West Texas Intermediate, WTI) 0.14% to $87.64.

(Writing by Marc Angrand, Editing by Kate Entringer)

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