European equity markets expected in scattered order before the start of the earnings season. The Eurostoxx 50   recorded  4,068.09 points -1.91%, the CAC 40  posted 6,529.42 points +2.07%,  the DAX 30  is trading  at     15,687.93 points +1.73%, the  FTSE 100 rose to   7,121.88 points +1.30%, the SMI  to  11,989.81 points +0.55%, the AEX at 732.15 points +1.25%, the BEL 20   rose to  4,183.51 points +1.58%,  IBEX 35  recorded  8,776.60 points +1.46%, DJIA  to   34,870.16 points +1.30%, the Nasdaq  is around   14,701.92 points +0.98%,  S&P 500  shows        4,369.55 points +1.13%  and the Nikkei 225 climbs to       28,541.09 points +2.15% (price at 7:25 am).

Exchange price at 06:50

Variation from closing in New York

EUR/USD trade at  1.1871   -0.07%, EUR/JPY  at  130.77   -0.01% and  USD/JPY  at 110.18   +0.05%  

TO FOLLOW IN FRANCE

Inquiets of the diffusion of the Delta variant in France, investors are waiting Monday for the speech, scheduled at 20:00, of the President of the Republic on the health situation. In addition to the obligation for caregivers to be vaccinated against Covid-19, Emmanuel Macron could announce new measures, such as the extension of the health pass, to fight against the pandemic during this allocation. Before these announcements, the president will meet with representatives of the automotive industry, who are seeking aid to finance the transition to electric vehicles.

ACTIONS

The main European markets are expected to present a contrasting picture on Monday, at the beginning of a week including both the start of the second quarter earnings season in the United States, the half-yearly hearing of the Chairman of the Federal Reserve (Fed), Jerome Powell before Congress and the publication of inflation figures across the Atlantic and in the euro zone.

At 7:35 a.m., the CAC 40 futures contract gained 2.5 points, or 0.04%, according to data from broker IG Markets. The DAX 30 contract was down 23 points, or 0.1%, and the FTSE 100 contract was down 21 points, or 0.3%.

Over the weekend, G20 finance ministers and central bankers approved a reform of the taxation of multinationals, a major step forward in terms of international cooperation after years of tensions. This agreement, already validated by 130 countries under the aegis of the Organisation for Economic Co-operation and Development (OECD), provides for the application of a minimum tax rate of 15% for companies.

Monday, investors will follow the visit of US Treasury Secretary Janet Yellen to Brussels. She will have lunch with the Presidents of the European Central Bank and the European Commission, Christine Lagarde and Ursula von der Leyen. Eurozone finance ministers are meeting for a Eurogroup.

In the United States, the earnings season will begin on Tuesday, with the accounts of jpmorgan and Goldman Sachs banks. They will be followed on Wednesday by their rivals Bank of America, Citigroup and Wells Fargo, then Thursday by Morgan Stanley. Several of these institutions have warned investors recently, indicating that revenues from their market activities are down sharply, at least compared to last year. For other sectors, investor expectations are generally high. Fund managers are waiting to see if companies will again exceed Wall Street's earnings forecasts.

In this context, Wall Street ended higher on Friday, propelling its three flagship indices to new records, as investors took advantage of the previous day's warning shot to make cheap purchases. The Dow Jones Index (DJIA) rose 1.3% to 34,870.15 points. The broader S&P 500 index rose 1.3% to 4,369.55 points. The tech-rich Nasdaq index rose 1% to 14,701.92 points.

  Despite the rebound in markets in the United States and Europe on Friday, markets remain nervous about the spread of the Delta variant of the coronavirus, which risks undermining the economic recovery of many countries.

  In Asia, major stock exchanges are trading in the green on Monday, supported by the decision of the People's Bank of China (PBOC) to lower the reserve requirement ratio for banks. The measure, which will take effect on July 15, is expected to inject 1 trillion yuan (130 billion euros) into the financial system. This is the first cut in this rate since April 2020, when the PBOC lowered it to revive a Chinese economy weighed down by the Covid-19 pandemic. At the end of the session, the Shanghai Composite Index gained 0.8% and the Hang Seng rose 0.6% in Hong Kong. At the same time, the Nikkei index of the Tokyo Stock Exchange gained 2.2%.

China's second-quarter gross domestic product (GDP) figures are expected on Thursday. Growth is expected to have slowed to about 8 percent from the same period in 2020, said Wang Yiming, a member of the PBOC's monetary policy committee. In an interview with state media, the central banker said China's economy could grow by just over 6 percent in the third quarter and between 5 percent and 6 percent in the last three months of the year.

OBLIGATIONS

  U.S. Treasury bonds are trading little monday morning. At 7:35 a.m., the yield on the ten-year Treasury bill, the market's benchmark, stood at 1.357%, compared with 1.360% on Friday night. U.S. yields rose on Friday after four consecutive sessions of decline, rebounding from their lowest levels in several months. The recent rate cut is seen as a sign that investors are shunning risky assets but, according to some analysts, bond buyers may underestimate future inflation.

Fears about the impact of the Delta variant of the coronavirus on economic growth are prompting investors to inject liquidity into bond funds, according to EPFR. Overall, investors placed $18.4 billion in bond funds in the first week of July, while a net amount of $6.8 billion was withdrawn from equity funds.

CHANGES

The euro retreats against the dollar on Monday morning. At 7:35 a.m., the single currency was trading at $1.1867. However, according to Trading Central's technical analysis, the euro could recover as far as $1.1910. The single currency is trending upwards after exiting a bearish channel and is supported by the 20-day rising moving average. A new rebound would allow the euro to rise towards $1.1895 and then $1.1910. Only a return to the key support level at $1.1840 would lead to a downward reversal.

 PETROLE

Oil prices fell slightly on Monday morning, after rising sharply on Friday.

  Prices ended higher on Friday in New York, continuing their rise the day before after the announcement of a fall in weekly crude and gasoline inventories in the United States. Oil contracts, however, lost ground throughout the week, as differences within the Organization of the Petroleum Exporting Countries (OPEC) remained unresolved and the market was concerned about the spread of the Delta variant and its possible impact on demand in some countries. At 7:30 a.m., the September contract for North Sea Brent lost 22 cents to $75.33 a barrel and the August contract for Nymex-listed light sweet crude (WTI) lost 19 cents to $74.37 a barrel.