EUROPEAN SCHOLARSHIPS DROP AT MID-SESSION
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by Laetitia Volga
PARIS (Reuters) – Wall Street is expected in dispersed order at the opening and European stock markets are down at mid-session Thursday amid fears of monetary tightening after the “minutes” of the US Federal Reserve (Fed).
In Paris, the CAC 40 lost 1.29% to 7,281.1 around 12:20 GMT. In Frankfurt, the Dax dropped 1.21% and in London, the FTSE 0.58%.
The pan-European FTSEurofirst 300 index fell by 1.19%, the EuroStoxx 50 in the euro zone by 1.37% and the Stoxx 600 by 1.17%.
Futures are reporting an open up 0.3% for the Dow Jones Index on Wall Street, virtually unchanged for the Standard & Poor’s-500 and down 0.4% for the Nasdaq.
On Wednesday, the New York Stock Exchange lost between 1% and 3.3% in reaction to the publication of the minutes of the last monetary meeting of the Fed whose tone more offensive than expected surprised the markets.
These “minutes” indicate that the institution could raise interest rates sooner than previously envisaged and that some of its members consider it appropriate to initiate the reduction in the size of the balance sheet soon after having started the rate hike given the market. employment and high inflation.
“Some are quite scared that the Fed could tighten faster [sa politique monétaire]”, said Carlos de Sousa, manager at Vontobel Asset Management.
“Maybe the market is overreacting though. The fact that members of the institution are arguing [du resserrement quantitatif] doesn’t mean they’re going to do it, “he said, adding that he expected one to three rate hikes in 2022 but would be surprised if quantitative tightening took place this year.
Investors will follow the first estimate of inflation in Germany in December at 1:00 p.m. GMT, followed by weekly jobless claims and the ISM index of activity in services in the United States.
VALUES IN EUROPE
In Europe, the technology sector is showing the strongest decline, its Stoxx index losing 3.09%, while the banking sector is benefiting on the contrary from the prospect of a rate hike in the United States.
The European banking index gained 0.9%, its highest since October 2018.
In Paris, Capgemini, red lantern of the CAC 40, gives up 5.17% and Dassault Systèmes 4.00%. Crédit Agricole, BNP Paribas and Societe Generale, for their part, rose from 1.02% to 2.05%.
Société Générale also benefits from the 8.95% jump in its subsidiary ALD, which plans to buy LeasePlan for 4.9 billion euros.
At the top of the CAC 40, Carrefour takes 3.77%, still driven by press information on a possible interest of Auchan for its competitor.
Coface fell 10.06%, Natixis having announced the sale of its entire stake at a price of 11.55 euros per share, ie a discount of 10.15% compared to the last closing price of the credit insurance group.
RATE
The publication of the debates in the Fed’s Monetary Policy Committee (FOMC) leads to higher yields on government bonds. In the United States, the ten-year-old continues to progress to evolve to the highest for nine months at 1.7369%.
In Europe, yields are also trending higher as euro area money markets now factor in at 100% the probability of a European Central Bank rate hike in October, taking into account the change in tone of the euro. Fed.
The German Bund yield was highest since May 2019 at -0.033%, very close to the positive zone.
CHANGES
On the foreign exchange market, the dollar is stable against a basket of benchmark currencies but gained 0.2% against the yen. The euro is unchanged at 1.1308 dollars.
OIL
Oil prices are on the rise again due to tensions in Kazakhstan, a producer member of OPEC +, and supply problems in Libya.
A barrel of Brent gained 1.08% to 81.67 dollars and US light crude 1.19% to 78.78 dollars.
(Laetitia Volga, edited by Blandine Hénault)
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