New loss of visibility in Europe after disappointing Chinese indicators-May 16, 2022 08:00

Major European stock exchanges expected to fall

Major European stock exchanges expected to fall

Paris (Reuters) -Europe’s major stock markets are expected to fall on Monday after the release of some lower-than-expected Chinese economic indicators highlighting the impact of confinement in the last few weeks on the second global economy. ..

Index futures suggest a 0.19% drop for the Frankfurt Dax, a 0.32% drop for the London FTSE 100 and a 0.27% drop for the Eurostocks 50. For CAC 40 in Paris, a drop of about 0.3% is expected according to the first indicators available. ..

China’s April retail sales were nearly double the expected 11.1% year-on-year decline, and industrial production was down 2.9% (the largest decline since February 2020), but Reuters consensus rose slightly. bottom. The official unemployment rate has risen from 5.8% in April to 6.1%.

These figures are clearly explained by the degree of health restrictions imposed by the authorities to stop the resumption of the COVID-19 epidemic. This is beginning to be mitigated by the full lifting of restrictions planned for June in Shanghai. 1 day

However, they question Beijing’s ability to reach its goal of growing gross domestic product (GDP) by about 5.5% throughout the year.

These questions are added to the question about the ability of the US economy to withstand the shock of a sharp rise in interest rates initiated by the Federal Reserve without causing too much damage.

Goldman Sachs has also lowered its US growth forecast to 2.4% this year and 1.6% next year.

Goldman Sachs economist Janhatzius said:

“We expect the recent tightening of fiscal conditions to continue, partly because we believe the Fed will behave as the market expects.”

They expect a 50 basis point rate hike at the next two Fed meetings, according to CME’s FedWatch barometer, but that doesn’t rule out the possibility of a significant rate hike.

The starting week will be driven, among other things, by US retail sales and industrial production figures on Tuesday, and public intervention by the Federal Reserve Authority.

Value to follow:

On wall street

The New York Stock Exchange traded high on Friday as relief from signs of possible peak inflation outweighed concerns that Fed policy tightening could drag the economy into a tailwind. Finished.

The Dow Jones Industrial Average rose 1.47% (466.36 points) to 32,196.66, the Standard & Poor’s 500 rose 93.81 points (+ 2.39%) to 4,023.89, and the Nasdaq Composite Index rose 434.04 points (+ 3.82%). It became 11,805.00.

The rebound of large cap stocks in the tech sector supported the session. Microsoft accounted for 2.26% and Apple 3.19%.

Despite these rises, the S & P 500 and Nasdaq recorded their sixth week of decline, with the S & P 500 recording the longest losses since the fall of 2012 and Nasdaq recording the longest losses since the spring of 2011.

Futures on key indicators to date suggest an opendown of about 0.5%.

In Asia

On the Tokyo Stock Exchange, the Nikkei Stock Average rose 0.48% in less than an hour from the closing price, but it rose 1.55% at the start of the session, so the Nikkei Stock Average rose using that momentum. Nasduck.

In China, the Shanghai Composite Index fell 0.51% and the CSI 300 fell 0.82%.

change point

Benefiting from both the decline in safe shelters and the prospect of a sharp rise in US interest rates, the dollar remains positive against other major currencies (+ 0.00%) and at the session. Not far from the 20 years that reached Friday.

Therefore, the euro is below $ 1.04. It returned to 1.0354 on Friday, the lowest level since early 2017.

In terms of cryptocurrencies, Bitcoin has fallen above $ 30,000, the lowest since December 2020, after falling to $ 21,400 on Thursday.

rate

In the government bond market, US 10-year yields fluctuate around 2.9%. It soared on Friday after the unexpected stability of US import prices was announced last month.

oil

The oil market has been struggling to take profits after rising nearly 4% on Friday, but the risk of supply tensions in the event of a European embargo on Russian crude oil limits the decline.

Brent fell 2.1% to $ 109.21 a barrel and US light crude oil (West Texas Intermediate, WTI) fell 1.93% to $ 108.36.

The latter reached $ 111.71, the highest level since March 28, at the beginning of the day.

(Marc Angrand, Wayne Cole, Sydney, edited by Matthieu Protard)

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