PARIS (Reuters) – Major European stock markets are expected to rise on Tuesday, following Asian markets, with Wall Street now moving more than 1% higher, with bargain buys now dominating after last week’s sharp fall and despite nagging worries about interest rates and inflation.
Index futures assume the Dax in Frankfurt is up 0.6%, the FTSE 100 in London is up 0.48% and the EuroStoxx 50 is up 0.55%. available indications.
So everything should amplify the bounce that began on Monday after the sharp decline of the previous two or even three weeks.
But while hunting for bargains makes sense in the current environment, it’s still too early to talk about a lasting recovery, as the debate about inflation and the extent of the rate hikes needed to contain it is far from over.
The first full-scale test of investors’ renewed interest in risky assets will be the publication at 14:30 of monthly data on resales of houses in the US, the real estate market is one of the most vulnerable to rising rates.
But the main meeting of the week will be the congressional hearing of Jerome Powell, president of the Federal Reserve, a week after a three-quarter-point rate hike passed by the central bank.
On Monday, St. Louis Fed Chairman James Bullard expressed hope that the United States could achieve a soft economic landing, as happened during the 1994 monetary tightening cycle.
ON WALL STREET
Wall Street is now expected to be in the green after a three-day weekend that followed the worst week for the Standard & Poor’s 500 index since March 2020.
Index futures are up 1.41% for the Dow Jones, 1.6% for the Standard & Poor’s 500 and 1.7% for the Nasdaq.
On Friday, ahead of the long June weekend, the Dow fell 0.13%, or 38.29 points, to 29,888.78 points, the S&P 500 rose 8.07 points, or 0.22%, to 3,674.84 points, while the Nasdaq Composite rose 152.25 points (+1.43 points). %) to 10,798.35.
Overall, the Dow and Nasdaq lost 4.8% over the past week, while the S&P 500 lost 5.8%.
On the Tokyo Stock Exchange, the Nikkei gained 2.48% less than an hour before the close and is nearing its best performance since May 30, a day after a three-month low, capitalizing on renewed interest in cyclical and tech stocks.
In China, this trend is supported, among other things, by the real estate sector, whose benchmark index added 1.21%: Shanghai SSE Composite – 0.26%, and CSI 300 – 0.46%. In Hong Kong, the Hang Seng rose 1.82% and the local tech stock index rose 2.22%.
Driven by a renewed appetite for riskier assets, the dollar shed 0.33% against other major currencies, including the euro, which rose to 1.052 (+0.10%).
However, the yen remains under pressure near a 24-year low hit last week against the US dollar at 135.58.
The Australian dollar is benefiting from statements by the RBA governor, the Australian central bank, that “more interest rate hikes” are needed.
Bitcoin (+0.49%) is currently holding above the $20,000 threshold at $20,657.16.
The yield on ten-year US government bonds rose slightly in Asian trading and amounted to 3.2806%.
The oil market has risen sharply as concerns about global supply tensions again outweigh prospects for a slowdown in demand after last week’s sharp fall.
The price of Brent crude rose 0.96% to $115.22 per barrel, while US light oil (West Texas Intermediate, WTI) rose 1.79% to $111.52.
NO MAIN ECONOMIC INDICATORS ON THE AGENDA FOR JUNE 21
(written by Marc Angrande)