Rise in sight for equities ahead of ECB

Rise in sight for equities ahead of ECB
Rise in sight for equities ahead of ECB

THE EUROPEAN SCHOLARSHIPS EXPECTED TO SLIGHTLY INCREASE AT THE OPENING

by Laetitia Volga

PARIS (Reuters) – The main European stock markets are expected to rise slightly on Thursday at the opening, with optimism over the economic recovery once again appearing to prevail pending the decisions of the European Central Bank, from which the markets anticipate the maintenance of an accommodative bias.

According to the first indications available, the Parisian CAC 40 could gain nearly 0.4% at the opening. Futures are reporting an increase of 0.25% for the Dax in Frankfurt, 0.15% for the FTSE in London and 0.41% for the EuroStoxx 50.

The major European indices continued their rebound on Wednesday as optimism about the recovery, fueled by good corporate results, took precedence over fears related to the spread of the Delta variant of the coronavirus.

Other second quarter results are on the program in Europe but investors’ attention will turn from 11:45 GMT to Frankfurt for the announcements of the Board of Governors of the European Central Bank ahead of the press conference of its president, Christine Lagarde, in 12:30 p.m. GMT.

This meeting will be the first to integrate the new ECB strategy unveiled two weeks ago, which foresees that inflation in the euro area may exceed its target set at 2%.

“With the upsurge in COVID-19, it seems highly unlikely that the ECB will be able to withdraw support at a time when economic activity is far from returning to normal,” said Michael Hewson, analyst at CMC Markets.

“Christine Lagarde will certainly give details on the future of the emergency purchasing program in the face of the pandemic (PEPP), increased to 1.850 billion euros and which runs until at least March 2022. This date could well be postponed, given his comments that emergency stimulus measures will not be cut anytime soon, “he added.

A WALL STREET

The New York Stock Exchange finished higher for a second straight day on Wednesday, as strong quarterly results and renewed optimism about the recovery of the US economy fueled investor appetite for risk. [.NFR]

The Dow Jones index gained 0.83% to 34,798.00 points, the S & P-500 gained 0.82% to 4,358.69 points and the Nasdaq Composite 0.92% to 14,631.95 points.

United Airlines (+ 3.8%), Chipotle (+ 11.5%), Coca-Cola (+ 1.3%), Verizon (+ 0.7%) ended up after the publication of their quarterly.

In post-close trading, Texas Instruments was down 5% after announcing a revenue target for the current quarter slightly below expectations.

IN ASIA

Chinese markets move in a mess, between gains in financials and commodities and losses in the pharmaceutical sector. The CSI300 index lost 0.08% and the Shanghai Composite Index gained 0.14%.

The Tokyo Stock Exchange is closed until the end of the week for a public holiday.

RATE

Yields on US Treasuries edged up after rising sharply on Wednesday amid weak demand spurred by a 20-year auction and declining risk aversion.

The ten-year yield gained just under a basis point to 1.2884%.

CHANGES

On the foreign exchange market, the dollar index is almost stable against a basket of benchmark currencies and the euro, pending the conclusions of the European Central Bank, is unchanged at 1.1795.

“The ECB’s new inflation target suggests that its monetary policy will remain ultra-accommodative for an even longer period, which would penalize the euro. We believe the ECB will be one of the last central banks under our cover at tighten its policy, ”the Commonwealth Bank of Australia strategists wrote in a note.

Bitcoin stabilizes at $ 31,977.78 after jumping 8% on Wednesday in reaction to statements by Elon Musk, open to resuming Tesla’s cryptocurrency payments.

OIL

The oil market is declining after the Energy Information Administration’s weekly figures on stocks in the United States, which show an unexpected increase in crude reserves (+2.1 million barrels), the first increase since May.

The barrel of Brent lost 0.66% to 71.75 dollars and US light crude 0.6% to 69.88 dollars.

(Report Laetitia Volga, edited by Bertrand Boucey)

 
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