Stocks expected to fall again, pound retreats – 09/29/2022 at 08:42


The Palais Brogniard, formerly the Paris Stock Exchange

by Laetitia Volga

PARIS (Reuters) – The main European stock markets are expected to fall on Thursday, erasing a slight rebound the previous day, and the price of the pound fell again as the impact of the British central bank’s intervention was tested. to preserve. the stability of the financial market is disappearing.

Futures contracts showed a drop of 0.08% for the Paris CAC 40, 0.16% for the Dax in Frankfurt, 0.4% for the FTSE in London and 0.21% for the EuroStoxx 50.

European markets ended slightly higher on Wednesday after the BoE announced a temporary program to buy British bonds in reaction to the rout caused by the markets by the presentation of the government’s budget projects, which raised fears of worsening inflation.

The Bank of England’s emergency intervention led to a fall in bond yields and a rise in the pound sterling, but in a sign that concerns persist, the British currency began to fall again on Thursday.

In addition to questions about Britain’s budget, investors remain concerned about the rapid increase in key rates that the Federal Reserve and other major central banks are running to slow inflation with the risk of tipping the world economy into recession.

Gediminas Simkus, Chairman of the Board of the Bank of Lithuania, said in an interview with Bloomberg TV that he favors a three-quarter rate hike in October.

Currently, the session of the day can be revived among other things by the first estimate of inflation in Germany at 12:00 GMT, then by the latest estimate of growth in the United States in the second quarter.

ON WALL STREET

Wall Street ended higher on Wednesday, helped by falling Treasury yields.

The Dow Jones index gained 1.88% to 29,683.74 points, the S&P-500 gained 1.97% to 3,719.04 points, the first gain in seven sessions, and the Nasdaq Composite advanced 2.05% to 11,051.64 points.

Bond yields fell again after the BoE announcements, with the ten-year falling nearly 25 basis points to 3.707%.

In the amounts, Apple sold 1.26%, the Bloomberg agency reported that the group stopped its plan to increase the production of new iPhones.

In the health sector, Biogen jumped 39.85% after announcing favorable results from a clinical trial of an experimental treatment for Alzheimer’s.

Index futures suggest an open in the red for today.

IN ASIA

After a nearly three-month low, Tokyo’s Nikkei rose 0.95%, trailing Wall Street’s lead.

In China, the trend declined despite the stabilization of the yuan and the government’s stated desire to support the economy. The Shanghai SSE Composite lost 0.37% and the CSI 300 0.25%.

CHANGES

The dollar advanced against a basket of benchmark currencies (+0.88%) and the pound gave 1.06% against the greenback, the relief caused by the intervention of the BoE lost in the foreign exchange market in the face of skepticism that continues to govern the economy of the United Kingdom.

“Concerns over the UK’s fiscal and economic plan suggest the pound is likely to remain traded against the dollar and other major currencies in the near term,” said Carol Kong, strategist at the Commonwealth Bank of Australia.

The European single currency fell to 0.9658 dollars, down 0.78%.

RATE

The yields of US Treasuries rose in Asian trading after a sharp decline in the previous session: the ten-year return more than thirteen basis points to 3.8319% and the two-year return to 4.2048%.

wool

The strength of the dollar and concerns about the deterioration of the economic outlook punished the price of oil: Brent lost 1.19% to 88.26 dollars a barrel and the US light crude (West Texas Intermediate, WTI ) 1.13% to $81.22.

(edited by Nicolas Delame and Kate Entringer)

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