The rebound should continue on the European stock markets – bourseorama.com

by Blandine Henault

PARIS (Reuters) – The rebound is expected to continue on Tuesday on the main European stock markets, in the wake of Wall Street and Asia, as the recent bout of risk aversion, fueled in particular by fears of an upcoming reduction monetary support from the Federal Reserve has subsided.

Futures are reporting a rise of 0.15% for the Dax in Frankfurt, 0.18% for the FTSE in London and 0.19% for the EuroStoxx50.

The first indications available also give the Parisian CAC 40 up 0.14% at the opening.

Investors are awaiting the Kansas City Fed seminar, which opens Thursday in Jackson Hole, Wyoming, including the scheduled intervention by Federal Reserve Chairman Jerome Powell on Friday.

However, they believe less and less that Jerome Powell can indicate on this occasion a timetable for the reduction of monetary support from the Fed, and in particular the reduction of asset purchases (“tapering”).

The latest PMI indicators released on Monday showed continued solid although slower growth in private sector activity in Europe and a slowdown for the third consecutive month in the United States.

A WALL STREET

The New York Stock Exchange regained some color on Monday after a hectic week as investors revived optimism after the final approval of Pfizer-BioNTech’s COVID-19 vaccine by the US health authority, which could revive the vaccination campaign in the United States.

The Dow Jones index gained 0.61% to 35,335.71 points. The S & P-500 gained 0.85% to 4,479.53 points and the Nasdaq Composite posted a closing record advancing 1.55% to 14,942.65 points.

Futures on all three indices are currently showing an increase of 0.14% to 0.19%.

IN ASIA

The Tokyo Stock Exchange rose 0.95% as the close approached, on the heels of Wall Street and supported by the advance of heavyweight SoftBank and the semiconductor sector.

In China, the stock markets are also upbeat, driven by the energy, spirits and technology sectors.

Mainland China’s large-cap CSI 300 is up 1.08% and Hong Kong’s Hang Seng is up 1.56%.

CHANGES / RATES

The dollar is trying to regain some colors on Tuesday (+ 0.05%) after falling 0.6% the day before against a basket of benchmark currencies, its biggest drop in one session since May 7.

Statements from Dallas Fed Chairman Rob Kaplan on Friday that he might reconsider his stance in favor of an upcoming reduction in support for the economy if the Delta variant weighs on growth, helped appease fears of a forthcoming “tapering”, thus weighing on the dollar.

The euro is trading at 1.1742, not far from yesterday’s high of 1.1750.

On the bond market, the yield on ten-year Treasuries gained more than one basis point, to 1.2684%.

OIL

The rebound continues in crude prices, which jumped 5% the day before after falling last week. The final green light from the US health authority to Pfizer-BioNTech vaccine against COVID-19 is fueling expectations of a recovery in demand in the wake of the potential acceleration of vaccination in the United States.

The barrel of Brent rose 0.33% to 68.98 dollars and that of US light crude (WTI) gained 0.27% to 65.82 dollars.

(edited by Bertrand Boucey)