Rebounding on Wall Street, Europe is trying to follow

from Leticia Volga

PARIS (Reuters) – Wall Street is expected to remain green in the open air, allowing most European stock markets to erase their losses on Thursday in the middle of the session, although fears of an economic recession amplified by a sharper-than-expected slowdown in private sector activity. the eurozone is still fluctuating. Futures contracts offer 0.51% growth for the Dow Jones, 0.8% for Standard & Poor’s-500 and 1.09% for the Nasdaq. In Paris, the CAC 40 rose 0.61% to 5952.95 around 11:30 GMT after losing 1.45% during the session. In Frankfurt, the Dax index fell 0.23%, and in London, the FTSE rose 0.25%.

The pan-European FTSEurofirst 300 rose 0.08%, the EuroStoxx 50 rose 0.43% in the eurozone and the Stoxx 600 rose 0.08%.

While Wall Street is set to recover the day after a small drop, and Europe is trying to do the same, the rebound is amid accumulating monetary and financial problems.

European indices experienced bad dynamics in the morning, which is underlined by lower-than-expected indicators of “lightning” PMI indices in the euro area in June, which reflect, in particular, the impact of inflation on activity.

“PMIs were much more disappointing than expected, and promising survey elements (…) exacerbated the adverse climate. New orders are stagnant, and entrepreneurs’ expectations have fallen to their lowest level since October 2020, indicating weak growth in the coming quarters, ”said Ricardo Amaro, senior economist at Oxford Economics.

On Wednesday, Federal Reserve Chairman Jerome Powell warned during a congressional hearing about the risk of a recession due to the sharp rise in interest rates.

He will be heard again in Congress from 14:00 GMT, this time before a House committee.

The Fed is far from the only central bank to tighten its monetary policy in hopes of controlling inflation, the latest being Norway’s rate, which on Thursday raised its main key rate by half a point, twice as much as expected, the largest increase. since 2002, and warned that he expects further growth in August.

VALUABLE VALUE STREET VALUES

US stocks rise in foreign trade, driven by falling bond yields: Tesla reportedly up 2% and Nvidia up 1.5%

VALUES IN EUROPE

While several European segments have risen, such as energy (+ 0.87%), others seem to be more in the red, such as the automotive sector (-0.6%) or banks (-0.8%). the latter suffered from falling bond yields.

Societe Generale and BNP Paribas lost about 1.8% in Paris, and Deutsche Bank – 3.99%.

Atos rose 9.03%, using information from BFM Business that the state would support a merger with Thales, and grew by 1.06%.

RATES Yields on government bonds fell after falling sharply amid economic concerns the day before: ten-year treasury bonds lost three basis points to 3.1262%.

In the European market, the control yields of the German Decade and the French Decade fell to 1.471% for the former and to 2.016% for the latter, to a two-week low.

CHANGES

The euro lost 0.61% to $ 1.0501, exacerbated by poor PMI indices, which have led some traders to expect less aggressive monetary tightening from the European Central Bank.

Money markets are now raising ECB rates by 161 basis points by the end of the year from 176 on Monday.

“Therefore, the ECB will take into account the figures of the day, but it will look for evidence that the picture they paint is materialized in concrete data before changing tactics,” said Stuart Cole of Equiti Capital.

The dollar recovers 0.4% to the basket of reference currencies

OIL

The oil market retreated slightly as investors reconsidered the impact of the potential economic downturn and rising central bank rates on oil demand.

Brent lost 0.31% to $ 111.39 a barrel and US light oil (West Texas Intermediate, WTI) lost 0.45% to $ 105.71.

On Wednesday, they fell by 2.4% and almost 4%, respectively.

(Written by Leticia Volga, edited by Sophie Louet)