OF Morning Bulletin

European equity markets expected in scattered order before the results of US tech. The Eurostoxx 50 opens at 4,102.59 points down 0.16%, the CAC 40 at 6,578.60 points (+0.15%), the DAX 30  at 15,618.98 points (-0.32%), the FTSE 100 at 7,025.43 points (-0.03%), the SMI at 12,049.63 points (-0.67%), the AEX at 745.10 points (-0.58%), the BEL 20  at 4,237.31 points (+0.16%), the IBEX 35 at 8,775.20 points (+0.67%), the DJIA at 35,144.31 points (+0.24%), the Nasdaq at 14,840.71 points (+0.03%), the S&P 500 at 4,422.30 points (+0.24%) and the Nikkei 225 at 27,983.11 points, an increase of 0.54%.

On the exchange rate side, the change from the close in New York indicates that EUR/USD remains stable at 1.1803 while EUR/JPY opens at 130.09 (-0.15%), USD/JPY at 110.23 (-0.15%).

European equity markets are expected to present a mixed picture on Tuesday at the opening, as investors await results from US tech giants Apple, Microsoft and Alphabet, which will be released after Wall Street closes, and that the Federal Reserve (Fed) begin two days of monetary policy meetings. At 7:25 am, the futures contract on the CAC 40 gained 4 points, or 0.06%, according to data from the broker IG Markets. The CONTRACT on the DAX 30 lost 21 points, or 0.1%, and the FTSE 100 contract lost 9 points, or 0.1%. On the economic indicator side, investors will be watching U.S. durable goods order numbers in June. U.S. and Chinese officials confronted their views on Covid-19, human rights and cybersecurity issues during a tense exchange Monday in the port city of Tianjin. In this context, Wall Street reached new records on Monday at the close. The Dow Jones index (DJIA), rose 0.2% to 35,144.12 points. The broader S&P 500 index also gained 0.2% to 4,422.32 points. The Nasdaq Composite gained 0.03% to 14,840.71 points. In Asia, the main indices are moving in scattered order on Tuesday. In Tokyo, the Nikkei index gained 0.5% at the end of the session. In contrast, the Shanghai Composite lost 0.1% and the Hong Kong Stock Exchange's Hang Seng fell 1.6%.

The yield on the ten-year U.S. Treasury fell Tuesday morning to 1.282%, from 1.297% late Monday, while investors remain focused on the Fed's upcoming announcements. According to economists, the U.S. central bank should leave the target range of the federal funds rate unchanged, at a level close to zero, and maintain the amount of its monthly asset purchases at $120 billion. The yield on the inflation-linked Treasury bond, or TIPS, fell to an all-time low on Monday. Considered an indicator of real return, which measures what investors receive from their bonds after offsetting inflation, the TIPS yield reached -1.120% in session, according to tradeweb data.

The euro is stable Tuesday morning against the dollar, just above the 1.1800 threshold, as investors await the results of major US tech companies and monetary policy announcements from the Fed. The strong start to earnings season and improved economic indicators are offsetting concerns about the Delta variant of the coronavirus and possible new lockdowns. The fact that the Federal Reserve advanced its expectations for the first U.S. interest rate hike in June likely prompted some investors to bet on a strengthening dollar rather than weakening in the week ending July 20. according to ING. CFTC data for this week shows net long positions in the dollar for the first time since March 2020. Long positions are bets on a rise in the price of an asset, while short positions are preferred if investors anticipate a price drop.

Oil contracts are progressing Tuesday morning, but their rise could be limited by current concerns about the Delta variant. This mutation of the virus responsible for Covid-19 continues to spread globally and travel restrictions are not easing, Oanda points out. The whole world is looking at how it will live with Covid-19 and concerns about oil demand in the short term could prevent any sharp rise in oil prices despite supply tensions, Oanda adds. At 7:15 a.m., the September contract for North Sea Brent was up 29 cents, at $74.79 a barrel. The same maturity on light sweet crude (WTI) listed on the Nymex was up 18 cents to $72.09 a barrel.