European markets look grim, rates go up

European markets look grim, rates go up
European markets look grim, rates go up

The main places ended in the red, with losses of 0.79% in Paris, 0.91% in London, 1.03% in Frankfurt. In Zurich, the SMI fell 0.77%.

The US markets were moving down sharply on Friday, after having dragged the European indices into the red as well, due to fears about the economic situation and inflation, which were also pushing up rates.

Wall Street gave ground around 4:35 p.m. GMT, with the Dow Jones stumbling 0.31%, the Nasdaq 0.71% and the S & P500 0.56%.

In Europe, after an opening up sharply, the main places ended in the red, with losses of 0.79% in Paris, 0.91% in London, 1.03% in Frankfurt, for the last session of the DAX at 30 values, since 10 companies will join the index on Monday. In Zurich, the SMI fell 0.77%.

The mood in the markets deteriorated after the publication on US consumer confidence for September. This came out slightly lower than economists’ forecasts and remains at a low level, according to the preliminary estimate of the University of Michigan survey.

The figure goes in the direction of a weakening of economic activity, which is also reflected in the first indicators in China for a few weeks.

“The general tone has been rather negative, due to concerns over the Delta variant of Covid-19, the rise in prices and the slowdown in economic activity,” said Michael Hewson, analyst at CMC Markets.

In addition, the equity markets were penalized by the rise in sovereign rates. The 10-year yields on US debt reached 1.38% (+ five basis points), “at their highest for two months, just before the meeting of the US Federal Reserve” (Fed), notes Mr. Hewson.

The US Central Bank (Fed) is holding its monetary policy meeting on Tuesday and Wednesday with new economic forecasts in store and perhaps indications on the pace and date of a future reduction in its asset purchases.

His remarks on the acceleration of inflation, which monetary institutions consider for the moment “temporary”, will also be scrutinized by investors.

In the euro zone, the European central bank has denied information from the Financial Times suggesting that it could hike rates as early as 2023, a year earlier than economists’ estimates, due to the more sustained upturn in inflation .

The miners are grinding in the dark

In London, Anglo American slipped 8.07% to 2,591 pence, BHP Group fell 4.80% to 1,873.80 pence and Rio Tinto lost 3.60% to 4,829.5 pence.

“The continued fall in iron ore prices, which have fallen below $ 100 per tonne and to their lowest levels this year, has helped undermine the industry,” said Michael Hewson.

In France, AcelorMittal fell 4.16% to 27.21 euros.

In New York, United Steel collapsed 7.87% to 23.40 dollars.

Vonovia sells housing in Berlin

The first German real estate group Vonovia (-0.53% to 52.92 euros) has formalized the sale, with its partner Deutsche Wohnen (-0.42% to 52.74 euros) of nearly 14,750 homes for 2.4 billion euros to the city of Berlin. The two companies intend to make a gesture to help resolve the tensions in the real estate market in the capital, which is subject to a significant rise in prices.

On the oil, euro and bitcoin side

Oil prices retreated slightly but remained sharply higher over the week, as production disruptions in the United States and vigorous demand gave new life to the black gold market.

Around 4.30 p.m. GMT, a barrel of Brent from the North Sea for November delivery was worth $ 75.03 in London, down 0.85% from the previous day’s close. In New York, a barrel of WTI for October yielded 1.10% to 71.81 dollars.

The euro crumbled 0.23% against the greenback at 1.1734 dollars.

Bitcoin advanced 1.03% to $ 47,640.

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