Market: Slight rise in sight in Europe, hope for China

by Claude Chendjou

PARIS (Reuters) – Main European stock markets are expected to rise on Wednesday in the wake of Wall Street on hopes of a recovery plan for the Chinese economy, but the trend should remain fragile amid questions about the strategy of central banks.

Futures contracts on indices suggest a rise of 0.08% for the CAC 40 in Paris, 0.12% for the Dax in Frankfurt, 0.02% for the FTSE 100 in London and 0.12% for the EuroStoxx 50.

According to Chinese customs data released on Wednesday, the country’s exports fell sharply in May, by 7.5% year-on-year, and imports fell more slowly than expected, by 4.5% year-on-year.

“Domestic demand is subdued, but external demand is even weaker…arguing for more aggressive monetary policy stimulus from the PBOC (People’s Bank of China) to support domestic demand,” said Carlos Casanova, Asia economist at UBP.

According to press releases, China also asked the country’s very large banks on Tuesday to reduce their deposit rates to stimulate the economy. Speculation about political support for the real estate sector further boosted shares in this sector last week.

However, investors should remain on guard as monetary policy meetings at the US Federal Reserve (Fed) and the European Central Bank (ECB) approach next week, as the RBA, Australia’s central bank, surprised markets on Tuesday by raising its key interest rate to 4.1 percent.

The OECD, for its part, will publish its new global outlook on Wednesday, while the World Bank on Tuesday was more cautious for 2024 due to particularly high interest rates.



The New York Stock Exchange closed slightly higher on Tuesday in a cautious and wait-and-see context, ahead of inflation figures and the US Federal Reserve’s monetary policy decision expected next week.

The Dow Jones ended in extremis in the green with an increase of 10.42 points or 0.03% to 33,573.28 points, the S&P 500 rose 10.06 points or 0.24% to 4,283.85 points and the Nasdaq Composite rose to 0.413.2% to 0.413.2%.

The big three indexes appeared to pause as the S&P 500 has rallied nearly 20% since an October 2022 low, thanks to gains in “mega-cap” stocks, an expected better-than-ever earnings season and hopes that the U.S. Federal Reserve will soon end the monetary tightening cycle.

In terms of values, Coinbase, the largest US platform for the exchange of cryptoassets, fell by 12.09% and the Securities and Exchange Commission (SEC), the US stock exchange policeman, has initiated legal proceedings against it.


On the Tokyo Stock Exchange, the Nikkei index fell 1.12% to 32,143.28 points and the broader Topix fell 0.84% ​​to 2,217.57 points as the close approached.

The MSCI index, which includes shares from Asia and the Pacific (excluding Japan), rose 0.6%.

In China, the Shanghai SSE Composite rose 0.2%, while the CSI 300 lost 0.2%.


The dollar is steady (+0.06%) against a basket of benchmark currencies as money markets bet on a Fed rate cut next week ahead of another hike in borrowing costs in July.

The yield on ten-year government bonds fell nearly four basis points to 3.6621%.

The euro is shown at 1.0685 dollars (-0.06%), while an ECB survey on Tuesday showed that consumers in the eurozone had downgraded their expectations for the development of inflation.


Concerns about economic developments weighed on oil prices: Brent fell 0.66% to $75.79 a barrel and US West Texas Intermediate (WTI) fell 0.68% to $71.25.

(Written by Claude Chendjou, edited by Bertrand Boucey)

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