Stock prices rebound, but inflation concerns remain-June 17, 2022 14:26

Equity has rebounded, but inflation concerns remain

Equity has rebounded, but inflation concerns remain

Claude Chenjo

Paris (Reuters)-Wall Street is expected to rise on Friday, and European stock markets are moving in the middle of a green session the day after the next rout of financial markets associated with inflation concerns and a significant slowdown in the economy. .. The stock market is expected to record the worst weekly performance in the week since March 2020.

New York Index futures show that Wall Street will open 0.6% on the Dow Jones, 0.8% on the Standard & Poor’s 500 and 1.1% on the Nasdaq.

In Paris, CAC 40 rose 1.49% to 5,974.06 around 11:30 GMT, showing a reduction of more than 20% on Thursday compared to the closing price of 7,376.37 points on January 5. Dax accounts for 1.52% in Frankfurt and FTSE 0.85% in London.

The Pan-Europe FTS Eurofirst 300 index rose 1.1%, with EuroStoxx 50 1.69% and Stoxx 600 1.54%.

Overall, in a week, the Paris index fell 3.59% at this stage and the STOXX 600 across Europe fell 3.48%.

In this week’s announcement, new tightening of screws by central banks in the United States, Switzerland and the United Kingdom in the face of rising inflation has revived concerns about a recession, pushing bond yields to record levels and raising some indicators. Bear market “.

The Bank of Japan, the last major central bank to make a monetary policy decision this week, chose to keep interest rates unchanged, as expected, but emphasized the need to “carefully” monitor the economic impact of the strong yen. It fell to the lowest price in 24 years against the dollar at 135.6 on Wednesday.

Inflation in May is 8.1% in the euro area, where money markets expect European Central Bank (ECB) interest rates to rise 190 basis points by December, according to figures released by Eurostat. Was confirmed. ..

In this context, the rebound shown by the stock market on Friday seems to be very vulnerable and is currently driven primarily by the defensive compartment, with real estate (+ 2.5%) at the top of the Stoxx600.

“It’s unlikely that there will be a final bailout from the wreckage that hit the financial markets this week,” said Susannah Streeter, an investment and market analyst at Hargreaves Landsdown. It is unlikely that it will disappear.

Wall Street Value to Follow

Photoshop publisher Adobe fell 3.6% in market preview on Thursday after falling short of forecasts for quarterly and annual revenues.

European Value In Europe, most compartments turned green in the middle of the session, but the most notable declines were in commodities (-0.2%) and energy (-0.2%), penalized by falling oil prices. Was imposed. Background of concerns about demand.

TotalEnergies and BP lost 0.2% and 1.2%, respectively.

In business news, ABN AMRO surged 16.8% following reports from Bloomberg that BNP Paribas (+ 2.3%) was interested in acquiring a Dutch group.

Nokian Tires, a Finnish tire maker, surged 9.2% due to an increase in its annual sales forecast. As a result, Michelin accounts for 1.8%.

The UK groups Tesco and Glencore have increased by 0.8% and 1.5%, respectively, driven by their forecasts. Meanwhile, EssilorLux Otica (+ 4.2%) has benefited from the announcement of the launch of its share buyback program.

rate

European bond yields fell on Friday after the previous day’s surge. Yields on 10-year German government bonds fell 3 basis points to 1.663%, while French bond yields with the same maturity fell 5 points to 2.207%.

Italian bonds fell further, hitting a 3.65% low since June 9, before reaching 3.673% at 18.6 points. European Central Bank (ECB) Governor Christine Lagarde said Thursday evening that the anti-fragmentation mechanism being developed to avoid over-spreading yields between bonds in blocks exceeds a certain threshold. If, however, specify the level of these thresholds.

The 10-year yield difference between Germany and Italy fell below 200 basis points on Friday, but exceeded a high of 250 points on Thursday.

In the United States, yields on 10-year Treasuries fell 8 points to 3.221% after falling nearly 10 points on Thursday.

Forex In Forex, the index, which measures the movement of the dollar against a basket of reference currencies, rebounded 0.65% after falling 1.45% on Thursday in connection with fears of a recession in the United States. Against the yen, without surprise from the Bank of Japan, the greenback rose 1.6% on Friday to 134.14 after a monetary policy decision.

The euro, which fell 0.26% after rising to 1.0601 on Thursday, is trading at $ 1.0520.

oil

Oil prices initially fell by more than $ 1 early in the morning, but have risen slightly, supported by the US announcement of new sanctions on Iran’s petrochemical sector, which prioritizes demand. .. However, crude oil should record a decline throughout the week.

Around 11:00 GMT, Brent barrels ranged from 0.52% to $ 120.41 and American light crude oil (West Texas Intermediate, WTI) ranged from 0.31% to $ 117.93.

(Written by Claude Chendjou, edited by Sophie Louet)

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