In Europe, the beginning of the week is marked by a rise dominated by central banks
By Claude Chenjou
PARIS (Reuters) – Other than London, major European stock markets are expected to rise cautiously at the start of a week marked by speeches from a number of central bankers at the World Economic Forum in Davos on Monday, monetary policy. A meeting at the Bank of Japan (BoJ) and a series of new corporate finance releases.
According to the first indicators available, the Dax in Frankfurt should gain 0.31% and the EuroStoxx 50 index 0.36% at the opening. The FTSE 100 in London, however, could yield 0.03%.
The Stoxx 600 and CAC 40, which gained 1.66% and 2.37% respectively last week as inflation slowed in the Eurozone, will look to post a third consecutive week of gains, a sight not seen since December 2.
Wall Street, which has underperformed U.S. stock markets since the start of the year compared to European stock markets, is expected to be unchanged at Monday’s open as quarterly corporate earnings season continues this week with Netflix, Procter & others among others. Gamble or even Morgan Stanley.
JPMorgan and Bank of America posted better-than-expected fourth-quarter results on Friday, with their bosses chilling markets, citing recession risks.
According to data from Refinitiv, profits of S&P-500 companies are expected to decline by an average of 2.2% in the fourth quarter.
On the central bank side, monetary policy meetings of the US Federal Reserve (FED) and the European Central Bank (ECB) are expected at the end of the month, with the World Economic Forum in Davos, Switzerland opening on Monday. At least nine members of the Fed are expected to speak. The Bank of Japan, for its part, begins a two-day meeting on Tuesday that could end with an adjustment to ultra-loose monetary policy as Japanese bond yields remain under pressure.
After emergency bond purchases of ¥5,000 billion (€36.03 billion) on Friday, the BoJ bought another ¥1,300 billion of Japanese sovereign debt on Monday to lower ten-year bond yields around the 0.5% volatility ceiling it tolerates.
ON WALL STREET
The New York Stock Exchange ended slightly lower on Friday, thanks in particular to bank stocks opening the quarterly earnings season.
The Dow Jones Industrial Average rose 0.33% or 112.64 points to 34,302.61.
The broader S&P-500 rose 15.92 points, or 0.40%, to 3,999.09.
The Nasdaq Composite rose 78.05 points (0.71%) to 11,079.16 points.
JPMorgan, Bank of America, Wells Fargo and Citigroup rose, as did the S&P-500 banking sector.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index fell 1.14% to 25,822.32 points, while the broader Topix fell 0.88% to 1,886.31 points.
In China, the SSE Composite in Shanghai, on the other hand, gained 1.14% and the CSI 300 gained 1.71%, supported by the prospect of a rapid recovery of the Chinese economy after the indices abandoned the “zero COVID” policy.
CHANGES
The Japanese currency continued to appreciate at 128.05 yen (+0.13%) to the dollar, its highest against the US dollar since May.
Against other major currencies, the dollar fell 0.1% to its lowest point since June, punished by the prospect of a slowdown in Fed rate hikes.
The euro rose 0.11% to $1,084.
RATE
The 10-year U.S. Treasury yield, which lost six basis points last week, emerged Monday at 3.51%.
Its German equivalent ended slightly lower on Friday at 2.14%.
OIL
Oil prices are easing but remain close to this year’s highs amid optimism about Chinese demand.
Brent fell 0.84% to $84.56 a barrel, US light crude oil (West Texas Intermediate, WTI) fell 0.81% to $79.21.
(Writing by Claude Chendjou, Editing by Bertrand Boucey)
