Sunday, September 24, 2023

European stock markets open a week with higher inflation in the US and the ECB

DAX rises by 0.5% to 15,823.15 points FTSE -100 If the CAC 40 rises by 0.5% to 7,520.02 points, it advances by just over half a percentage point Eurostoxx 50 rises by 0.5% to 4,257.45 points and the FTSE MIB The session starts at 28,433 points after registering a 0.7% rise. The Ibex 35 wakes up this Monday with a rise of 0.61% at 9,421.60.

Among the leading stocks of the session, Intesa Sanpaolo rises more than 2% to 2.4660 euros. BBVA rose 1.7% to 7.085 euros and Prosus rose just over 1.7% to 64.15 euros.

Siemens shares reacted negatively, falling more than 1% to 135.55 euros, SAP lost 0.3% and Adyen fell 0.14% to 737.90 euros.

Session without major macro references. A look at inflation in the USA and the ECB

Today will be a day without much macroeconomic reference, with the release of industrial production in Italy and consumer inflation expectations in the United States.

US inflation for August will be announced on Wednesday, a relevant reference for the Federal Open Market Committee (FOMC) meeting on the 19th and 20th of this month. “Investors indicate a very low probability, less than 10%, that the Federal Reserve (Fed) will raise its benchmark interest rates again at the above meeting, a probability confirmed by recent statements from members of the FOMC since 2016. “Most of them have ruled out a rate hike in September,” say the experts at Link Securities.

If inflation surprises positively, bond and stock markets will react negatively. On the contrary, if this variable meets expectations – the general variable remains stable at 4.3% and the underlying variable falls from 4.7% in July to 4.3% in August – or the analysts’ consensus forecasts “improved”, the markets will react positively.

This Thursday Markets are counting on statements from ECB President Christine Lagarde at the organization’s monthly meeting. The current question for investors is whether the ECB will interrupt its interest rate increase process or, on the contrary, whether it will raise interest rates again for the tenth time in a row. The best thing for markets, says Link Securities, is that “the ECB is not raising its official interest rates and is leaving the door open” not to do so again if inflation continues to fall, although we think the likelihood is slim consider this possible scenario. It should also be noted that, as this is the last meeting of the quarter, the ECB will announce its new macroeconomic picture for the Eurozone, in which we expect inflation to be revised upwards and the region’s economic growth to be revised downwards confirmed, would increase the likelihood in the short/medium term that the Eurozone economy could potentially enter stagflation.

Following a higher close on Wall Street indicators, futures trade higher. The Dow Jones rose by 0.2 percent to 34,651 points S&P 500 It rose by just over three tenths to 4,472.50 points and the NASDAQ 100 rose by just over half a percentage point to 15,358.20 points.

Stock markets in Asia closed the session with mixed sentiment. The Nikkei lost 0.4% to 32,475 points, the Shanghai index rose 0.8% to 3,142 points, the Hang Seng lost 1.2% to 17,975 points and the Kospi gained 0.2% to 2,556.88 points too.

Oil prices are falling in the Asian market as economic concerns in China weighed on the fuel demand outlook, although Brent remains above $90 a barrel, supported by reduced supply after Saudi Arabia and Russia extended supply cuts. Brent oil futures lost 0.17% to $90.50, while West Texas lost just over four tenths to $87.08.

The euro dollar rose 0.3% to $1.0733. In the cryptocurrency market, Bitcoin rose slightly to $85,862.5 and Ethereum fell 0.6% to $1,616.40.

Bonds are trading lower in the debt market. The yield on the federal bond rises to 2.6305%, the yield on the ten-year Spanish bond rises to 3.668% and the yield on the T-note rises to 4.294%.

World Nation News Desk
World Nation News Desk
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