Quasi-stability in sight in Europe, oil down sharply

PARIS (Reuters) – The main European stock markets are expected to show little change on Thursday, with general market sentiment remaining fragile in the face of the still high risks of recession and persistent inflation.

Futures contracts on indices suggest an increase of 0.05% for the Dax in Frankfurt and 0.08% for the EuroStoxx 50 while in Paris, the CAC 40 should start stable according to the first indications available.

The London Stock Exchange will remain closed until Monday for Queen Elizabeth II’s Platinum Jubilee celebrations.

Yields on US Treasuries hit their highest level in two weeks on Wednesday, with the rebound in the ISM manufacturing index and the JOLTS labor market survey suggesting that wages and prices should continue to rise and therefore encourage the Federal Reserve to continue raising its interest rates.

Meanwhile, JPMorgan Chase chief executive Jamie Dimon worried some investors by warning of the risk of an economic “hurricane” triggered by inflation.

“The fact that one of the biggest banks thinks the economic headwinds are going to be extremely strong due to the Ukraine-Russia conflict and soaring inflation only adds fuel. on fire,” said AvaTrade analyst Naeem Aslam.

The economic agenda of the day in Europe is practically empty but in the United States, investors await the results of the monthly ADP survey on private employment and the weekly figures for unemployment claims.

AT WALL STREET

The New York Stock Exchange ended lower on Wednesday against a background of rising bond yields, the economic indicators of the day in the United States not being, in the eyes of investors, likely to deflect the Federal Reserve from its aggressive strategy of raising interest rates in an attempt to control inflation.

The Dow Jones index fell 0.54%, or 176.89 points, to 32,813.23, the Standard & Poor’s 500 lost 30.98 points (-0.75%) to 4,101.17 and the Nasdaq Composite lost fell 86.93 points (-0.72%) to 11,994.46.

Meta Platforms lost 2.58% after the announcement of the upcoming departure of Sheryl Sandberg, the chief operating officer of Facebook and then Meta for 14 years.

Conversely, Salesforce gained nearly 10% thanks to an upward revision of its adjusted annual profit forecast, the group having also specified that it did not see any significant impact of the deterioration in the economic outlook on its activities.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index lost 0.12% less than an hour from closing after the six-week closing high recorded on Wednesday, a decline that notably affected technology stocks such as Sony (-2, 79%) or Trend Micro (-2.80%).

In China, stocks are moving without a clear trend, the Shanghai SSE Composite is up 0.16% but the CSI 300 is unchanged.

EXCHANGES/RATES

The dollar, supported by the rise in US bond yields, hit a three-week high against the yen at 130.23 but only posted a modest rise against a benchmark basket (+0.03%). , with the euro recovering some ground to 1.0653 after falling 0.8% on Wednesday.

Yields on Treasury bills fell a little but remained close to the two-week highs recorded on Wednesday, at 2.951% for ten-year securities and 2.674% for two-year ones.

OIL

The strength of the dollar favors profit-taking in the oil market after the rise of the last few days and before the OPEC+ meeting, with some investors speculating on a possible increase in production from Saudi Arabia.

Brent fell 1.89% to $114.09 a barrel and US light crude (West Texas Intermediate, WTI) 1.98% to $112.98.

OPEC+ member countries are expected to confirm their strategy of slowly increasing production for the coming months, but the Financial Times has reported that Saudi Arabia may accelerate its own pumping to compensate for a drop in Russian supply linked to the Western sanctions.

(Written by Marc Angrand)