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Major European stock markets are expected slightly down on Monday at the opening in cautious markets in the approach of a likely rate cut in the United States and the resumption of trade negotiations between the United States and China.
(Updated with Futures, Tokyo Closing)
- * Stock markets in Europe expected down moderately
- * Fed to announce Wednesday rate cut
- * Negotiations between Beijing and Washington will resume
by Patrick Vignal
PARIS, July 29 (Reuters) – Europe's major stock exchanges are expected to contract slightly on Monday as markets open to cautious expectations of a likely rate cut in the United States and the resumption of trade talks between the two countries. United States and China.
According to the benchmark index futures, the Paris CAC 40 .FCHI and the Dax in Frankfurt .GDAXI would each lose around 0.3% early in the trading session while the FTSE in London .FTSE would start trading. balanced.
The Federal Reserve is expected to announce Wednesday that it lowers its rates, signaling the beginning of a new cycle in its monetary policy. Most markets are down 25 basis points, some still predicting 50 basis points at a time.
The signals for the future will be important, with markets expecting a decline of 100 basis points in one year.
"The message will be the key because it will help the markets to know if it is a simple preventative drop or the beginning of a relaxation cycle, the latter being built into the courses," says Tapas. Strickland, chief economist of NAB.
US and Chinese negotiators are also scheduled to meet this week in Shanghai, for the first time since the truce last month at the G20.
Minimal agreement is possible, but conflict resolution is unlikely, say Barclays badysts.
VALUES TO FOLLOW:
IN ASIA
The Tokyo Stock Exchange ended a slight decline in profit taking in a wait-and-see market ahead of the Bank of Japan's announcements.
The Nikkei .N225 index lost 0.19% to 21,616.80 points. The Topix .TOPX, wider, also yielded 0.19% to 1.568.57. {.TOPX; TRDPRC_1} points.
The BoJ is expected to announce Tuesday that it is still as accommodating.
The MSCI index of Asia Pacific (excluding Japan) .MIAPJ0000PUS yields 0.4%.
At WALL STREET
The well-received results of Alphabet GOOGL.O and Twitter TWTR.N helped Friday the S & P-500 .SPX and Nasdaq .IXIC to record closing records, the announcement of a slower growth than expected growth of the US economy in the second quarter doing nothing to curb the indices.
The leaps of Google's parent company and Twitter confirm the good performance of US companies. About 75% of those who published their results announced earnings above expectations, according to Refinitiv data.
RATE
Expectations of rate cuts continue to weigh on bond yields. US Treasuries at 10 years US10YT = RR lost more than one basis point to 2.0685%.
In the first trade in Europe, the 10-year Bund DE10YT = RR, reference rate of the euro zone, loses some ground, around -0.38%
EXCHANGE
The dollar is stable against a .DXY reference basket, near a two-month high. White House economic adviser Larry Kudlow backed the greenback, saying on Friday that the Trump administration was dismissing an intervention to bring it down.
OIL
The two crude benchmark contracts fell slightly, still hurt by fears for global demand.
(Markets Service, with Wayne Cole in Sydney)
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