EUROPE WAITS IN A STRONG FALL

PARIS (Reuters) – Major European equity markets are expected to decline sharply on Monday following the latest worrying news on China’s health situation, adding to investor nervousness two days after US inflation data was released in June. -United.

Index futures suggest declines of 1.49% for the CAC 40 in Paris, 1.36% for the Dax in Frankfurt, 1.24% for the FTSE 100 in London and 1.63 % for EuroStoxx 50.

Several large Chinese cities have announced new health restrictions to full containment in an attempt to curb the resurgence of the COVID-19 outbreak and Shanghai gears up for massive new testing campaigns in the coming days after a new sub-variant of the Omicron Strain is identified. , the BA.5.2.1.

Macau has also closed all of its casinos for the first time in more than two years.

This information feeds recession fears, which remain a major market concern, despite the higher-than-expected US job creation figure released Friday.

This statistic, which suggests that the US labor market remains healthy, could indeed provide a further argument for the Federal Reserve to quickly tighten its monetary policy, at the risk of slowing activity in the name of fighting inflation.

From this point of view, monthly consumer price data in the United States will be studied closely, as well as the first results of the University of Michigan survey on consumer sentiment on Friday, two weeks before the next Fed meeting.

The opening week will also be marked by the start of the publication of the results in the United States, with the big banks opening the ball on Thursday and Friday. The consensus predicts a 6% year-over-year increase in Standard & Poor’s 500 earnings in the second quarter.

A WALL STREET

The New York Stock Exchange closed on Friday in mixed order after a session marked by investors’ hesitation over the impact the better-than-expected job creation figure could have on the Federal Reserve’s monetary tightening strategy.

The Dow Jones Index fell 0.15%, or 46.4 points, to 31,338.15 and the Standard & Poor’s 500 fell 3.24 points, or 0.08%, to 3,899.38 but the Nasdaq Composite gained 13.96 points (+ 0.12%) to 11,635.31.

Over the course of the week, the Dow was up 0.8%, the S & P-500 by 1.9% and the Nasdaq by 4.6%.

On the value side, Levi Strauss’s results were welcomed (+ 1.03%) while Twitter fell by 4.85% after initial information from the Washington Post that Elon’s plan to acquire the social network Musk would have been “seriously threatened”.

Index futures suggest a lower open for now.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index closed 1.11% after reaching its highest level in a month of session, supported by the Liberal Democratic Party’s big victory in Sunday’s elections, which strengthens the parliamentary majority.

In China, the Shanghai SSE Composite was down 1.59% and the CSI 300 by 1.96%, while in Hong Kong the Hang Seng was down 3.15%.

EXCHANGES / RATES

The dollar, supported by fears for global growth, returned to a sharp rise against the other major currencies (+ 0.38%). It thus reached a new 24-year high against the yen, with the strengthening of the parliamentary majority in Tokyo perceived as a promise to maintain a very accommodative monetary policy.

The euro fell 0.42% against the greenback at 1.014, but held above its nearly 20-year low, hit Friday at 1.007.

RATE IT

The 10-year US Treasury yield fell to 3.071% after the sharp rally triggered Friday by US employment data, which supported the hypothesis of a three-quarter point hike in the fed fund rate. “At the end. month .

Its German equivalent fell 2.5 basis points in early trading to 1.312%.

OIL

Oil prices amplify their decline and wipe out most of Friday’s gains as recession fears and health restrictions in China once again outweighed supply tensions.

Brent lost 1.18% to 105.76 dollars a barrel and US light crude (West Texas Intermediate, WTI) by 1.47% to 103.25 dollars.

Both had earned more than 2% on Friday.

NO GREAT ECONOMIC INDICATOR ON THE AGENDA FOR 11 JULY

(Written by Marc Angrand)

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