Relief on China outweighs inflation concerns

Futures contracts on the main New York indices were up 1.47% for the Dow Jones, 1.55% for the Standard & Poor’s 500 and 1.88% for the Nasdaq.

In Paris, CAC 40 rose 1.41% around 11:00 am GMT to 6,437.11, the highest since May 5th. The FTSE 100 is advancing 0.94% in London and the Dax 1.53% in Frankfurt.

The EuroStoxx 50 index rose 1.59%, the FTSEurofirst 300 1.48% and the Stoxx 600 1.48%.

Shanghai authorities have lifted some of the strict health restrictions imposed in recent weeks to curb a resurgence of the COVID-19 outbreak for three consecutive days after no new cases outside the quarantine zones.

At the same time, according to various sources, Chinese Vice Premier Liu He was to meet with the leaders of the high-tech industry throughout the day, information that keeps hopes of reducing regulatory pressure on the industry.

The CSI 300 China big-equity index finished the session up 1.25%, and Hong Kong’s “technology” index rose 5.78%.

In Europe, employment figures in France and the United Kingdom and the slight upward revision of growth in the euro area in the first quarter were generally welcomed.

But if optimism prevails, concerns about growth and inflation remain, especially as economic indicators released Monday in China and the US have fueled fears of a sharp slowdown in activity.

As such, markets will monitor US retail sales and industrial production numbers ahead of the Wall Street opening, as well as public response from several Federal Reserve officials, including its chairman, Jerome Powell, from 6 p.m. GMT.

VALUES IN EUROPE

All major sectors of the European rating are developing in the green at midday, with the largest increases for the raw materials segment, with the Stoxx index 3% and high-tech (+2.8%).

In Paris, Engie is taking 5.97% at the beginning of the CAC 40, after raising its annual results targets and announcing an agreement with Russian giant Gazprom to pay for gas purchases.

Daimler Truck (+7.21%) and Caixabank (+3.79) also benefit from the results, which were welcomed by analysts.

Vodafone lagging behind the market (-0.13%) is neglected and its forecasts for fiscal 2023 remain below consensus.

RATIO

Investors’ return to equities puts government bonds at a disadvantage, leading to higher yields: ten-year U.S. Treasuries rise four basis points to 2.924 percent and two-year plus six points to 2.6319%.

This movement, which has become more evident in the Eurozone since the start of the session, intensified after the statements of Dutch Central Bank Governor Klaas Knot that he found the quarter-point rate hike in July “realistic”. ” but does not exclude a half-point increase.

The ten-year German Bund’s yield thus rose more than eight points to 1.021%.

Money market futures now price increases in European Central Bank (ECB) interest rates by a total of 105 basis points through the end of the year.

CHANGES

These comments by Klaas Knot also benefit the euro, which bounced back to 1.0515 last Wednesday, gaining 0.81% against the dollar.

On the contrary, the dollar continues its decline against other major currencies that started after a 20-year high on Friday: the index, which makes it possible to track its fluctuations against a reference basket, is more than 1, 0.62%, 4% below its Friday high.

LIQUID OIL

Despite Hungary’s persistent opposition, crude oil prices have reached a seven-week high on the prospect of the European Union placing an embargo on Russian oil and China’s hopes of resuming demand.

Brent crude rose 0.77% to $115.12 a barrel after hitting 115.53, its highest since March 28, and US light crude (West Texas Intermediate, WTI) rose 0.71% to 115.01 after peaking at 115.43. rose to dollars.

(Written by Marc Angrand)