European stocks are expected to fall ahead of services PMIs
By Claude Chenjou
PARIS (Reuters) – Services PMI indices were expected to remain on track, with Europe’s main stock markets gaining on Wednesday after a sharp rise linked to hopes of a slowdown in interest rate hikes by major central banks. be published.
According to the first indicators available, the Frankfurt Dax, which gained 3.78% on Tuesday, should lose 0.43% at the opening on Wednesday. The FTSE 100, which closed yesterday with an increase of 2.59% in London, is expected to lose 0.37%. The EuroStoxx 50 index is expected to fall 0.35% after rising 4.2% on Tuesday.
Stock markets are expected to fall again in September as worsening manufacturing activity in Europe and the United States fueled speculation that key interest rate hikes will end from Monday. Investors then believed that recent economic indicators indicated that the rise in the cost of credit was beginning to have an effect by curbing demand. This scenario was reinforced by a lower-than-expected interest rate hike by Australia’s central bank on Tuesday.
New Zealand’s central bank raised its key interest rate by 50 basis points to 3.5% on Wednesday and said a 75 basis point hike was under consideration, a sign that inflation is a concern despite the risk of a recession.
Investors will closely watch monthly S&P Global services index numbers in Europe and the US on Wednesday, while ADP firm ADP’s private survey of US employment is expected ahead of Friday’s report from the US Labor Department. .
A day earlier, the job vacancies report (“JOLTS”) showed they fell to their lowest level in nearly two and a half years in August, signaling a worsening labor market.
On Tuesday, the French State presented a buyout offer for the balance of EDF’s capital at a price of 12 euros per share, which it has not yet held and is due to run from November 10 to December 8.
ON WALL STREET
The New York Stock Exchange continued its sharp rally that began a day earlier with tech stocks the first beneficiaries of a drop in bond yields on hopes that the Federal Reserve will be less aggressive on interest rates. ‘interest.
The Dow Jones Industrial Average increased by 2.8% or 825.43 points and reached 30,316.32 points.
The broader S&P-500 rose 112.5 points, or 3.06%, to 3,790.93, its biggest gain since May 2020.
For its part, the Nasdaq Composite, which has a strong technology component, advanced 360.97 points (3.34%) to 11,176.41 points.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index rose 0.53% to 27,136.33 points, while the larger Topix rose 0.34% to 1,913.3 points.
In China, the SSE Composite of Shanghai gave up 0.55% and the CSI 300 gave up 0.58%.
RATE
The yield on the 10-year U.S. Treasury note, which hit a two-week low on Tuesday after already falling more than 20 basis points on Monday, rose again to 3.625% on Wednesday from 3.617% a day earlier.
The German Bund with the same maturity ended the session at 1.88% on Tuesday, its lowest since September 19, after falling to 1.77% in the session.
CHANGES
The dollar also lost 0.12% and strengthened (+0.2%) against a basket of benchmark currencies, including the euro at $0.9971.
The pound is trading 0.24% lower at $1.1449 after two sessions benefiting from the suspension of the UK’s plan to scrap the top income tax bracket.
The yen was almost flat against the dollar at 144.06 (+0.02%).
OIL
Oil prices, which rose sharply on Tuesday, were steady as OPEC+ is due to hold a meeting on Wednesday where the cartel could decide to cut production by two million barrels per day (bpd).
Brent fell by 0.15% to $91.66 a barrel, US light crude oil (West Texas Intermediate, WTI) fell by 0.23% to $86.32 a barrel.
(Writing by Claude Chendjou, Editing by Nicolas Delame)
