MARKET POINT-Down seen in Europe with USA-China tensions (updated) – 08/02/2022 at 08:41

(Updated on futures, European bond market open, Tokyo shutdown, RBA announcements)

* European indices are expected to decline

* Return of tensions in Taiwan

* The “futures” US and Asia are retreating

* Ten-year Treasuries hit lowest since April

by Laetitia Volga

PARIS, Aug 2 (Reuters) – Major European stock markets are expected to fall on Tuesday at the opening in the wake of Asian markets due to renewed tensions between China and the United States over Taiwan and concern about the slowdown of the global economy, two factors that favor Treasuries as a safe haven.

The first indicators available show a decrease of 0.32% for the Parisian CAC 40 .FCHI , of 0.64% for the Dax of Frankfurt .GDAXI , of 0.44% for the FTSE of London .FTSE and of 0.62% for the EuroStoxx 50.

According to several sources, Nancy Pelosi should go to Taiwan during the day as China has repeatedly warned against the visit of the speaker of the American House of Representatives to the island that it considers part of its territory. .

➦ Chinese planes near Taiwan ahead of Pelosi’s expected visit

Beijing has sent several aircraft to fly near the demarcation line in the sensitive Taiwan Strait, a source said, while several Chinese warships have arrived in the area since Monday.

“This may be a storm in a teacup, but international and Taiwanese investors are very worried,” said Stephen Innes of SPI Asset Management.

In addition to developments in the Sino-US issue, fears of a recession remain the main source of concern for global markets. Data released Monday in China, Europe and the United States signaled a slowdown in industrial activity, keeping oil prices under pressure.

VALUES FOLLOWING:

➦ STOCK EXCHANGE-Amounts to follow in Paris and Europe (updated)

IN ASIA

In China, tensions between Washington and Beijing resulted in a decline of 1.25% for the large cap CSI 300 .CSI300 and 1.49% for the Shanghai Composite Index .SSEC .

In Tokyo, the Nikkei .N225 fell 1.42%, the lowest in a week, under the influence of diplomatic concerns between China and the United States and the rise of the yen against the dollar JPY= which punished many values -export scale.

Tokyo Electron 8035.T, Fanuc 6954.T, Toyota Motor 7203.T and Daikin Industries 6367.T lost between 2% and 3.04%.

ON WALL STREET

“Futures” in the US suggested a slightly lower opening of the day after a session in the red, due to the reduction of companies in the energy sector.

On Monday, the Dow Jones .DJI index fell 0.14% to 32,798.4 points, the S&P-500

.SPX lost 0.28% to 4,118.62 points and the Nasdaq Composite .IXIC fell 0.18% to 12,368.98 points.

The energy sector .SPNY fell 2.2% and Exxon Mobil XOM.N fell 2.5%, among the top contributors to the decline in the S&P-500.

Boeing BA.N rose 6.13% after two sources told Reuters the US Federal Aviation Administration approved the planemaker’s plan to resume deliveries of 787 Dreamliners.

RATE

Aversion to risky assets favored bonds and weighed on their yields: that of ten-year Treasuries lost five basis points to 2.5552%, the lowest in four months.

German ten-year yields fell slightly, to 0.729% in early trading.

CHANGES

The dollar fell for a fifth straight session against a basket of benchmark currencies (-0.05%) .DXY , as traders continue to position themselves for a possible slowdown in the pace of Federal Reserve rate hike.

The euro is shown at 1.0239 dollars EUR= .

The offshore yuan hit a session low since mid-May CNH= due to tensions surrounding Nancy Pelosi’s visit to Asia as well as disappointment from China’s latest economic indicators.

The Australian dollar AUD= fell nearly 1% as the Reserve Bank of Australia signaled it was off a predetermined rate hike path after raising its key interest rate by 50 basis points. .

➦ Australia’s central bank raised rates by half a point to 1.85%

CBA analysts said the RBA’s comments implied “pragmatism” in how it would take its next steps. “We don’t think he is in a rush to raise the policy rate more than his estimated neutral rate (about 2.5%),” they added.

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Oil prices fell slightly after recent data showed a slowdown in global manufacturing activity amid weak demand.

Brent LCOc1 fell 0.2% to $99.83 a barrel and US light crude (West Texas Intermediate, WTI) CLc1 fell 0.12% to $93.78.

THERE ARE NO MAJOR ECONOMIC INDICATORS ON THE AGENDA TODAY

(Writing by Laetitia Volga, Editing by Kate Entringer)

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