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OF Morning Newsletter

06/06/2023
Source : ORISHAS FINANCE
Categories: General Information

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At the opening, European equity markets should be hesitant. The Eurostoxx 50 opens at 4,293.24 points (-0.70%), the CAC 40 at 7,200.91 points (-0.96%), the DAX 40 at 15,963.89 points (-0.54%), the FTSE 100 at 7,598.00 points (-0.12%), the SMI at 11,415.00 points (-0.25%), the AEX at 763.34 points (-0.21%)), the BEL 20 at 3,634.52 points (+0.05%), the IBEX 35 at 9,289.10 points (-0.30%), the DJIA at 33,562.86 points (-0.59%), the Nasdaq at 13,229.43 points (-0.09%), the S&P 500 at 4,273.79 points (-0.20%), the Nikkei 225 at 32,433.08 points (+0.67%).

In terms of exchange rates, the change from the close mentions that in New York, EUR/USD is at 1.0723 (+0.07%), EUR/JPY at 149.54 (-0.01%), and USD/JPY at 139.48 (-0.08%).


The candidacy of Leo Apotheker, former head of the American Hewlett-Packard and German SAP, is proposed to chair the board of directors of the IT services group Atos by Sycomore Asset Management to replace Bertrand Meunier. With the intention of having Leo Apotherker appointed as a director, the share manager requested the registration of a resolution at the Atos general meeting scheduled for June 28. For his part, Antin is holding his annual general meeting today. No economic indicators are due to be released in France on Tuesday.


After the publication of contrasting economic indicators in the United States, which weigh on interest rate expectations from the Federal Reserve (Fed), European equity markets are expected to open slightly lower this day. Data from the IG broker mentions that at 7:40am the FTSE 100 gave up 6 points, or 0.1%, the DAX 40 contract lost 20 points, or 0.1%. The CAC 40 futures contract lost 3.4 points, or 0.1%

as well.

Seema Shah, head of global strategy at Principal Asset Management said that investors are “again focusing on persistent inflation and an extremely tight labor market, which is leading to a change in the outlook for interest rates of interest. Not only does the market believe that another hike in key rates is likely, but it is increasingly ruling out a rate cut this year.” Asian markets are increasing on Tuesday. At the end of the session, in Tokyo, the Nikkei index gained 0.7%, the Hang Seng on the Hong Kong Stock Exchange gained 0.5% and the Shanghai Composite Index gained 0.1%.


As investors assess what the Fed should decide on interest rates at its June 13 and 14 meeting, US Treasury yields rose on Tuesday. Deutsche Bank believes that “the week following the release of the employment figures is almost always a bit quiet in terms of statistics, and this week, the Fed also began its period of silence before next week's Monetary Policy Committee meeting. Recall that the US Consumer Price Index will be published on Tuesday 13, the day before the Fed's monetary policy decision.”

According to CME Group's FedWatch tool, markets assess the probability that the Fed will leave interest rates unchanged between 5% and 5.25% at the end of its meeting at 79.4%. That probability was 36% just a week ago, and the chances of a 25 basis point increase were 64%. Around 7:20 a.m., the rate on the 2-year US Treasury bond rose by 4 basis points to 4.500% and that of the 10-year bond gained about 2 basis points, to

3.704%.

This morning, the euro rose slightly against the dollar and was unchanged against the yen. The greenback is losing ground against the Japanese currency. For MUFG Bank, the ISM price sub-index is now at its lowest level since May 2020, a sign that inflationary pressures in the United States are easing. According to the bank, factory orders slowed in April, rising by 0.4% over a month after increasing by 0.9% in March. For her, the latest indicators on the American economy have been mixed. According to Morgan Stanley, the dollar could continue to appreciate this year because of its defensive nature and its return advantage

.

The financial institution believes that “even if the global economy succeeds in avoiding a recession, differences in the way central banks react and relatively firm economic growth [in the United States] mean that the investors are likely to maintain a defensive position in the markets

.”


After rising on Monday following Saudi Arabia's voluntary production cut for the month of July, oil futures fell on Tuesday. According to ANZ analysts, despite investors' initial caution about the effectiveness of reducing production, they should make do with price support measures from the Organization of Petroleum Exporting Countries (OPEC). For analysts, “the oil market is expected to tighten significantly during the second half of this year.” The July contract on light sweet crude (WTI) traded on Nymex lost 26 cents at $71.89 per barrel and the August contract on Brent lost 19 cents, to 76.52 dollars per barrel,

around 7:20am.
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