A trader works at CMC Markets in the City of London
by Bertrand De Meyer
The main European stock markets are expected to fall at the opening on Monday, with investors digesting the American employment data published on Friday.
Futures contracts suggest an opening down 0.3% for the Parisian CAC 40, compared to a decline of 0.21% for the FTSE in London, a decline of 0.4% for the Dax in Frankfurt and a decline of 0.43% for the Stoxx 600.
The rate outlook of the American Federal Reserve (Fed) weighs on European indices at the start of a busy week before the return of Donald Trump to the presidency of the United States of America.
The US employment report, released Friday and which showed that the US economy had created 256,000 jobs in December compared to 160,000 expected by analysts' consensus, reinforced expectations of a cautious bias from the Fed.
Markets have already cut expectations for a Fed rate cut to just 27 basis points for the full year 2025 as CPI inflation for December will be released on Wednesday and five Fed officials are due to express over the next few days.
The week will also be marked by the opening of the results season across the Atlantic with the banks, JP Morgan, Wells Fargo, Citigroup and Goldman Sachs getting the ball rolling on Wednesday.
The inauguration of Donald Trump on January 20 will then mark the start of a busy period for the global economy which will have to navigate between the promises of the Republican candidate during the campaign and the decisions actually taken, in particular on customs duties.
In Europe, monetary policy will also be on the market menu with the publication of data in the main economies of the euro zone or even the “minutes” of the last monetary policy meeting of the European Central Bank on Thursday.
A WALL STREET
The New York Stock Exchange ended sharply lower on Friday under pressure from high yields after the publication of the monthly employment report from the US Department of Labor, which aroused fears of a resumption of inflation.
The Dow Jones index lost 1.63%, or 696.75 points, to 41,938.45 points.
The broader Standard & Poor's 500 lost 91.21 points, or -1.54% to 5,827.04 points.
The Nasdaq Composite fell by 317.25 points, or -1.63% to 19,161.628 points.
This is the largest one-day percentage decline for the Dow and S&P-500 since December 18.
The three major New York indices also finished clearly in the red over the week, with the Dow Jones and the S&P-500 losing almost 2% and the Nasdaq more than 2.3%, its biggest weekly drop since the week. from November 11.
IN ASIA
Asian stock markets are trending downward following the latest US employment data.
The Hong Kong Hang Seng index declined by 1.18%, the Shanghai SSE Composite fell by 0.3%, the CSI 300 fell by 0.3%.
The Tokyo Stock Exchange is closed due to a public holiday.
RATE
Yields continue to rise after jumping on Friday upon the publication of the monthly US employment report.
The ten-year Treasury yield increased by 1.2 bps to 4.7861%. That at 30, which briefly exceeded 5% on Friday, is practically unchanged, at 4.966%.
In Europe, the German ten-year yield increased by 2.6 bp to 2.595%.
CHANGES
The dollar continues to rise and is approaching its highest level since November 2022 after data on job creation in December in the United States.
The dollar gained 0.2% against a basket of reference currencies, the euro eroded by 0.25% to 1.0218 dollars, and the pound sterling lost 0.5% to 1.2143 dollars.
In Asia, the yen advanced 0.13% to 157.48 yen per dollar, the Australian dollar lost 0.3% to 0.6143 dollars.
OIL
The barrel continued its rise on Monday, with Brent reaching its highest level in four months, following new sanctions imposed on Friday by the US Treasury on Russian oil.
Brent rose by 1.37% to $81.15 per barrel and American light crude (West Texas Intermediate, WTI) rose by 1.85% to $77.99.
(Written by Bertrand De Meyer, edited by Blandine Hénault)
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