Office skyscrapers in the La Défense business district in Paris
The main European stock markets are expected to decline at the opening on Monday, with investors positioning themselves for the publication of PMI indicators and possible censorship from the French government.
Futures contracts suggest an opening down 1.08% for the Parisian CAC 40, compared to 0.09% for the FTSE in London, 0.25% for the Dax in Frankfurt, and 1.16% for the EuroStoxx 50.
Final manufacturing PMI indicators for November are due from 08:50 GMT and are expected to confirm the slowdown in industrial sector activity in the bloc.
Michel Barnier should hold his government accountable on Monday for the draft Social Security budget (PLFSS) and in return expose himself to censorship with the National Rally (RN) in the position of arbiter.
Such an outcome would add to the volatility of French sovereign assets: the spread between the Bund and the 10-year OAT reached on Wednesday its highest since 2012, at 90.3 basis points, while Greek sovereign securities posted Friday a better performance than French securities.
The yield gap reached 83 bp at the opening of the interest rate markets on Monday.
Many indicators are expected during the week, including the monthly US employment report on Friday.
Investors will be attentive to data from the United States, where the presidency of Donald Trump complicates the outlook for activity and monetary policy.
VALUES TO FOLLOW: [L5N3N01BJ]
A WALL STREET
The New York Stock Exchange ended up on Friday at the end of a shortened session the day after Thanksgiving, driven by technology stocks and the distribution sector with the start of the end-of-year purchasing period with the “Black Friday.”
The Dow Jones index gained 0.42%, or 188.59 points, to 44,910.65 points. The broader Standard & Poor's 500 gained 33.64 points, or 0.56% to 6,032.38 points. The Nasdaq Composite advanced 157.69 points, or 0.83% to 19,218.166 points.
The S&P-500 and the Dow Jones finished at closing records.
IN ASIA
The Tokyo Stock Exchange rose, supported by banking stocks which anticipate further rate increases but under pressure from the decline in Fast Retailing. The Nikkei index gained 0.8% on Monday to 38,513.02 points. The broader Topix gained 1.27% to 2,714.72 points.
The head of Fast Retailing, which owns Uniqlo, is criticized in China for having declared not to buy cotton produced in Xinjiang. The group lost 1.3%.
Chinese indices ended higher, supported by good industrial activity figures, with the Caixin Global sector PMI indicator reaching a 5-month high. The Hong Kong Hang Seng index increased by 0.46%, the Shanghai SSE Composite strengthened by 1.13%, the CSI 300 by 0.79%.
RATE
Yields are rising in the United States, with investors positioning themselves for numerous indicator releases this week.
In Japan, yields are at a 16-year high, with the governor of the Bank of Japan declaring that a rate hike is “approaching”, with indicators in line with such a scenario.
The yield on the ten-year Treasury increased by 2.1 bps to 4.2148%, while the yield on the two-year security increased by 2.6 bps to 4.2002%.
The yield on the 10-year Japanese bond reached 1.078%.
The German ten-year yield fell by 1.6 bp to 2.072%, that of the two-year rate lost 2.7 bp to 1.929%.
CHANGES
The dollar is strengthening, Donald Trump having asked on Saturday countries grouped under the acronym BRICS that they undertake not to create a new currency nor to support any currency likely to replace the dollar in international trade, while French political uncertainty weighs on the euro.
The dollar gained 0.39% against a basket of reference currencies, the euro eroded by 0.51% to 1.0521 dollars, and the pound sterling lost 0.34% to 1.2694 dollars.
In Asia, the yen declined by 0.46% to 150.44 yen per dollar, the Australian dollar lost 0.11% to 0.6503 dollars.
OIL
Good activity data in China supports the barrel, while the situation in the Middle East remains unstable.
Brent rose by 0.92% to $72.5 per barrel, American light crude (West Texas Intermediate, WTI) rose by 0.96% to $68.65.
MAIN ECONOMIC INDICATORS ON THE AGENDA FOR DECEMBER 2:
COUNTRY GMT INDICATOR PERIOD PREVIOUS CONSENSUS
FR 08:50 Manufacturing PMI Nov. 43.2 43.2
FROM 8:55 a.m. Manufacturing PMI Nov. 43.2 43.2
EZ 09:00 Manufacturing PMI Nov. 45.2 45.2
UK 09:30 Manufacturing PMI Nov. 48.6 48.6
EZ 10:00 Unemployment rate Oct. 6.3% 6.3%
US 15h00 ISM manufacturier Nov. 47,5 46,5
(Written by Corentin Chappron, edited by Augustin Turpin and Kate Entringer)
