(AP Photo/Shuji Kajiyama)
MARKET REVIEWS. Global markets were mostly lower Monday morning after Friday’s announcement that U.S. employers added 272,000 jobs in May, making it harder for the U.S. Federal Reserve to keep interest rates in check.
Stock market indices at 7:20 a.m.
In France, the CAC 40 collapsed by 1.7% at the start of the session in Paris. THE DAX German lost 0.7% and the FTSE100 British 0.4%.
In New York, before the markets opened, the average Dow Jones industrial values slipped 0.2% and the broader index S&P 500 of 0.1%.
In Asia, the Nikkei 225 added 0.9% in Tokyo. The markets of Chinaof Hong Kong and D’Australia were closed for a holiday. Seoul lost 0.8%.
On the New York Commodity Exchange, the price of oil dropped 13 US cents to US$70.73 per barrel.
Context
The Paris Stock Exchange fell sharply and its European counterparts declined on Monday, the day after the European elections and the surprise announcement of legislative elections in France, a factor of uncertainty, while Wall Street should open close to equilibrium.
French President Emmanuel Macron responded to the historic victory of the far right in the European elections on Sunday with a resounding dissolution of the National Assembly, a poker move which plunges France into deep political limbo.
In reaction, the Paris Stock Exchange fell by 1.55% around 12:05 GMT. “It’s really atypical, we haven’t seen a political movement on the CAC 40 for a long time,” Alexandre Baradez, head of market analysis at IG France, told AFP.
“The early legislative elections in France will increase uncertainty regarding the political trajectory of Europe’s second largest economy”, and in particular concerning “the budgetary orientation of the French government”, which already suffered a downgrade in its rating at the end of May. credit, comments Reto Cueni, chief economist at Vontobel bank.
The shock wave was felt on the bond market: the interest rate on ten-year French government bonds rose to 3.20%, the highest since November, compared to 3.10% at Friday’s close. , and widens the gap with the German equivalent, which stands at 2.66%.
Elsewhere in Europe, the far right has made inroads in Germany, Italy, Austria and the Netherlands, but without upsetting the European Parliament.
“A potential traffic jam in Brussels and uncertainty ahead of the elections in France could undermine the emerging optimism regarding Europe,” comment Barclays analysts.
The euro was weighed down on Monday by the result of the European elections and lost 0.44% against the US dollar, to 1.0754 US dollars per euro.
On the other side of the Atlantic, the main event of the week will be the meeting of the monetary policy committee of the American Federal Reserve (Fed). The majority of observers are banking on a status quo before perhaps a first cut in the institution’s key rates in September.
According to Franck Dixmier, head of bond management at Allianz GI, the Fed will wait until it has “stronger convictions on the sustainability of the deceleration of inflation before starting its cycle of rate cuts”.
The May consumer price index in the United States will also be published on Wednesday, just before the start of the Fed meeting.
Shock wave in France
French stocks are over-represented in the list of worst declines.
The banks were the most penalized by the context of uncertainties: Société Générale fell by 7.69%, BNP Paribas by 4.67% and Crédit Agricole by 3.59%.
Next come companies in the highways, electricity and gas sectors. Investors “fear nationalization, a takeover or stricter supervision of certain activities,” explains Alexandre Baradez.
Eiffage fell by 5.46% and Vinci by 4.79%. The Paris airport manager ADP, more than 50% owned by the French state, lost 4.36%.
Engie lost 4.13% and Veolia 3.30%.
On the oil side
Oil prices are increasing: the price of a barrel of Brent from the North Sea for delivery in August increased by 0.89%, to 80.32 US dollars, and a barrel of American West Texas Intermediate (WTI), with due in July rose 0.68% to 76.04 US dollars.
Bitcoin lost 0.36% to 69,429 US dollars.
