Growth expected in Europe despite economic and political concerns

PARIS (Reuters) – Major European stock markets are expected to open higher on Monday despite continued concerns about the economy, while the Paris market could be slowed down by the results of French legislative elections, in which President Emmanuel Macron lost an absolute majority in the National Assembly.

According to the final results of the Ministry of Internal Affairs, the Presidential Coalition Ensemble won 245 seats, far from the 289 required to achieve an absolute majority, an unprecedented scenario that will force the government to compromise and could slow down the reforms the head of state wants.

Futures contracts are up 0.22% for the CAC 40 in Paris, 0.65% for the Dax in Frankfurt and 0.21% for the FTSE in London.

European markets fell for the third week in a row on Friday as interest rate hikes by several central banks, including those in the US, UK and Switzerland, heightened fears of a sharp economic downturn.

Several Fed officials are scheduled to speak in the coming days, including Fed Chairman Jerome Powell on Wednesday and Thursday in Congress.

European Central Bank (ECB) President Christine Lagarde was able to moderate the session in Europe on the occasion of its hearing in the European Parliament at 13:00 GMT.

In terms of indicators, German producer price growth slowed by 1.6% in May, while economists polled by Reuters had expected growth by an average of 1.5%. On an annualized basis, the index rose by 33.6% against 33.5% last month and in line with the consensus forecast.

ON WALL STREET

The New York Stock Exchange will be closed on Monday due to the June holiday commemorating the end of slavery in Texas.

The New York Stock Exchange ended trading on Friday in disarray after a hard weekly correction amid fears of a recession and interest rate hikes by major central banks.

The Dow Jones fell 0.13% to 29,888.78. It fell 4.8% over the week, the biggest weekly drop since October 2020.

The S&P-500, on the other hand, added 0.22% to 3674.84 but was down 5.8% for the week.

The Nasdaq Composite rose more sharply, up 1.43% to 10,798.35, ending a difficult week on a positive note (-4.8%).

IN ASIA

On the Tokyo Stock Exchange, the Nikkei fell 0.74% as chip and energy stocks fell.

In China, the CSI300 gained 0.67% on real estate stocks after data showed real estate sales surged on support measures.

Another supporting factor is that President Joe Biden’s administration is considering lifting some tariffs on Chinese goods, two senior US officials said.

CHANGES

In the foreign exchange market, the “dollar index”, which measures the fluctuations of the dollar against a basket of international currencies, lost 0.29%. The euro added 0.26% to $1.0525.

Bitcoin fell 2.43% to below $20,000.

As for bonds, on the first exchanges, the yield of German bonds by 10 is stable and amounts to 1.661%. Its French equivalent is approximately 2.2250% of a basis point.

OIL

The oil market is trending higher as fears of supply cuts prevail over fears about the economy and demand for oil.

The price of Brent crude oil rose by 0.37% to $113.54 per barrel, while US light oil (West Texas Intermediate, WTI) rose by 0.26% to $109.85.

(edited by Kate Entringer)