Fall in equities in sight while waiting for inflation in the United States

MAJOR EUROPEAN STOCK EXCHANGES EXPECTED DOWN by Laetitia Volga PARIS (Reuters) – Major European stock markets are expected to fall on Tuesday at the open and government bond yields continue to climb on fears of runaway inflation likely to lead to greater monetary tightening in the United States. Futures contracts indicate a drop of 1.4% for the Paris CAC 40, 1.41% for the Dax in Frankfurt, 0.53% for the FTSE in London and 1.36% for the EuroStoxx 50 The theme of inflation is essential as the publication of monthly consumer price figures in the United States approaches (12:30 GMT), a further acceleration of which could comfort the Federal Reserve in the scenario of monetary tightening more pronounced than expected. The Reuters consensus is calling for US consumer prices to rise 8.4% year on year in March, which would represent the biggest rise in the index since January 1982. “We’re pretty hawkish in terms of rising U.S. rates and we believe it’s not just the extent of monetary tightening but its pace that will impact investors,” Elizabeth Tian, ​​head of fixed income management at Citigroup, told Reuters. Sidney. “Equity markets have been very strong…but we expect the Fed meeting in May to result in an announcement on tapering monetary easing and that’s when- where we might see volatility emerge in equities,” she added. In Germany, inflation harmonized with European standards (HICP) reached its highest level in more than 40 years, at 7.6% year on year in March, according to final figures published by Destatis. ON WALL STREET The New York Stock Exchange ended lower on Monday, as the continued rise in bond yields weighed on major growth stocks. The Dow Jones index fell 1.19% to 34,308.08 points, the S&P-500 lost 1.68% to 4,412.83 points, and the Nasdaq Composite fell 2.18% to 13,411.96 points. . Futures currently suggest a decline of 0.25% to 0.4% at the open. IN ASIA On the Tokyo Stock Exchange, the Nikkei dropped 1.81% to a four-week low as technology stocks, heavyweights in the index, fell in the wake of the negative session on Wall Street. Resona Asset Management chief strategist Koichi Kurose pointed out that concerns over China’s COVID-19 lockdown and rising commodity prices were also affecting the trend. In China, the large-cap CSI 300 (+1.53%) and the Shanghai SSE (+1.2%) index turned higher, a move analysts blame on the easing of regulations video games. RATES On the bond market, the yield on the ten-year US government bond rose by more than four basis points to 2.8224% after hitting its highest level in session since December 2018 at 2.8360%. Its German equivalent gained in the first exchanges nearly three basis points, to 0.833% at its highest since July 2015. Ditto for the ten-year French, which climbed to 1.348%. EXCHANGES Variations are limited on the foreign exchange market where the dollar climbs 0.22% against a basket of reference currencies for its ninth session of consecutive increases under the effect of expectations of a rate hike by the Fed. The euro gave up some ground, around 1.0863 dollars, after being supported the day before by the results of the first round of the presidential election in France. Oil prices rise, erasing some of the previous day’s losses, as the market weighs the possibility of sanctions against the Russian energy sector and OPEC warns that it will be unable to offset the loss of Russian crude . Brent gained 2.97% to 101.4 dollars a barrel and American light crude (West Texas Intermediate, WTI) took 3.13% to 97.24 dollars. On Monday, they both lost around 4% amid fears for demand with the health crisis in China. (Laetitia Volga, edited by Bertrand Boucey and Jean-Michel Bélot)