Paris fell by 0.50%, Frankfurt fell by 0.56% and Milan by 0.39%, while London finished close to balance, at +0.09%. In Zurich, the SMI fell 0.59%.
American borrowing rates fell sharply on Monday, while the stock markets remained cautious at the start of a week which promises to be eventful, with the presidential election in the United States and central bank meetings.
The yield on 10-year government bonds stood at 4.29% around 4:50 p.m. GMT, compared to 4.38% at the close on Friday. Its equivalent at maturity two years stood at 4.16% compared to 4.21%.
“The markets are reintegrating the potential for a Democratic victory” in the American presidential election, says Vincent Juvyns, member of the JPMorgan AM strategy team interviewed by AFP, explaining the current easing of American bond rates.
“The bond market has been one of the barometers of market sentiment as to the probability of seeing one or the other candidate win,” he continues, with the Republican camp being perceived as “more spendthrift and therefore more inflationary”.
On the currency side, “the decline in probabilities, over the weekend, of a Donald Trump victory triggered a selling movement on the dollar” on Monday, comments Kelvin Wong, Oanda analyst.
The greenback fell 0.45% against the single currency, to 1.0883 dollars per euro around 4:50 p.m. GMT.
Furthermore, the winner of the presidential election will probably not yet be known when the meeting of the monetary committee of the American Federal Reserve (Fed) begins on Wednesday morning. It may not be either when it ends at midday on Thursday, and the institution’s president, Jerome Powell, holds his press conference.
A cut of a quarter of a percentage point is mostly expected, which would drop the Fed’s key rates into the range of 4.50-4.75%. A first rate cut was decided in September, for the first time since March 2020, by half a percentage point.
On the stock markets, on Wall Street, the Dow Jones lost 0.86%, the broader S&P 500 index -0.41%, and the Nasdaq -0.31% around 4:50 p.m. GMT.
In Europe, the Paris Stock Exchange lost 0.50%, Frankfurt fell by 0.56% and Milan by 0.39%, while London finished close to balance, at +0.09%. In Zurich, the SMI fell 0.59%.
Before the American election, “the stock market freezes like a rabbit in front of a snake,” observes Konstantin Oldenburger for CMC Markets. “Uncertainty and nervousness reign among investors.”
“For European exporters, the prospect of Trump returning to power means more tariffs, which is never a good thing for corporate profits,” says Fawad Razaqzada, analyst at City Index.
“These concerns would be reduced if Kamala Harris wins, due to the continuation of existing economic policies,” he adds.
Donald Trump has promised customs duties of “more than 10%” on all imports, which would allow him to finance a large tax cut.
Vonovia sees red
Germany’s number one real estate company unveils its third quarter results on Wednesday. Heavily indebted for years, forced into multiple devaluations of its real estate portfolio, Vonovia is now preparing to present a new strategy to grow again, according to an article in the German magazine Wirtschaftswoche.
The stock ended down 1.82% in Frankfurt on Monday.
Eni cashes a very big check
The Italian hydrocarbon giant Eni (-0.09% in Milan at the close) announced that it had collected $1 billion thanks to the sale of 100% of its Nikaitchuq and Oooguruk oil fields off the coast of Alaska to American oil group Hilcorp.
OPEC+ benefits oil companies
Oil prices rose on Monday, driven by the decisions of members of OPEC+ (Organization of the Petroleum Exporting Countries) to postpone by one month the increase in their production, planned for early December.
Around 4:50 p.m. GMT, the price of a barrel of Brent from the North Sea rose 2.24%, to $74.74. Its American equivalent, a barrel of West Texas Intermediate (WTI), gained 2.41% to $71.17.
Enough to push oil stocks: BP gained 1.00% and Shell +0.58% at the close in London. In Paris, TotalEnergies finished up 0.31%.
On Wall Street, Exxon Mobil (+2.69%), Chevron (+0.08%), ConocoPhilips (+1.16%) were trading in the green around 4:50 p.m. GMT.
