Still shaken by Powell's restrictive remarks, European stock markets should continue their decline at the start of the week. The Eurostoxx 50 opens at 3,603.68 points (-1.93%), the CAC 40 at 6,274.26 points (-1.68%), the DAX 40 at 12,971.47 points (-2.26%), the FTSE 100 at 7,427.31 points (-0.70%), the SMI at 10,942.16 points (-1.10%), the AEX at 705.08 points (-1,870%), the SMI at 10,942.16 points (-1,10%), the AEX at 705.08 points (-1,870%), the SMI at 10,942.16 points (-1,10%), the AEX at 705.08 points (-1,870%), the SMI at 10,942.16 points (-1,10%), the AEX at 705.08 points (-1,870%), the SMI at 10,942.16 points), the BEL 20 at 3,663.47 points (-1.84%), the IBEX 35 at 8,063.90 points (-1.51%), the DJIA at 32,283.40 points (-3.03%), the Nasdaq at 12,141.71 points (-3.94%), the S&P 500 at 4,057.66 points (-3.37%) and the Nikkei 225 at 27,910, 84 points (-2.55%).

On the exchange side, the change from the close in New York indicates that EUR/USD is at 0.9916 (-0.50%), EUR/JPY at 137.70 (+0.44%), and USD/JPY at 138.89 (+0.95%).

Investors will react on Monday to measures announced over the weekend by the government to respond to the energy and climate crises, including a contained rise in electricity and gas prices in 2023. Prime Minister Elisabeth Borne also told the newspaper Le Parisien that she was not “closing the door” to taxing the “super profits” of companies that benefit from rising energy prices.

European stock markets are expected to fall again at the opening on Monday, as Federal Reserve (Fed) Chairman Jerome Powell's restrictive tone in Jackson Hole continues to shake markets and US Treasury bond rates continue to rise. Around 7:30am, the CAC 40 futures contract lost 69 points, or 1.1%, according to data from the IG Markets broker. The DAX contract fell 177 points, or 1.4%. The London Stock Exchange is closed on Monday due to a bank holiday in the United Kingdom.

At the Jackson Hole symposium on Friday, the president of the US Federal Reserve (Fed) expressed his determination to fight inflation even if it meant causing “painful” effects for the economy. The Fed is determined to continue raising interest rates to stabilize prices, even though this policy will have the effect of curbing growth, Jerome Powell warned. Monetary tightening measures “will bring inflation down, but they will also hurt households and businesses,” the central banker said at the annual conference organized by the Kansas City Fed in Jackson Hole. “These are the unfortunate costs of reducing inflation. But a failure to restore price stability would cause much greater damage,” he added.

After these remarks, Wall Street fell sharply on Friday, hit by the prospect of a permanently restrictive monetary policy in the United States, which will weigh on growth. The Dow Jones index fell by 1,008 points, or 3%, to 32,283.40 points. The S&P 500 lost 3.4% to 4,057.66 points, and the Nasdaq Composite fell 3.9% to 12,141.71 points. Over the week as a whole, all three indices lost more than 4%. In the wake of the American stock exchanges, the main Asian indices moved into the red on Monday. At the end of the session, the Nikkei index fell by 2.5% in Tokyo, the Hang Seng on the Hong Kong Stock Exchange lost 0.8% and the Shanghai Composite fell by 0.3%.

U.S. Treasury bond yields continued to rise on Monday, after Jerome Powell's speech in Jackson Hole on Friday. The Fed chair emphasized that the US central bank would maintain its restrictive measures until inflation was under control. Around 7:30am, the yield on the 10-year Treasury note, the market benchmark, gained 7 basis points to 3.105%. The inversion of the yield curve worsened on Friday, reflecting the expectation of further short-term interest rate hikes that could lead to an economic recession. According to analysts, the Fed could increase its projection for the neutral rate and continue to rely on data to steer its monetary policy. Bond market investors are now waiting for the release on Friday of the U.S. employment report for the month of August, and the consumer price index for the month of August in the United States will be released on September 13.

The euro continued to fall against the dollar on Monday, remaining below parity. Around 7:30am, the single currency fell by 0.5% to 0.9918 dollars. The latest speeches by Jerome Powell and other members of the Fed's Monetary Policy Committee confirm Capital Economics's view that the US central bank should maintain a restrictive policy longer than investors anticipated. This tightening of financial conditions will continue to support the dollar, the financial intermediary believes.

Crude oil futures gained ground on Monday morning, supported in part by speculation about a possible reduction in oil production from OPEC+ countries. These speculations help ease the pressure exerted by the prospect of a deal on the Iranian nuclear program and the prospect of further Fed rate hikes. Around 7:20 a.m., the October contract on North Sea Brent rose by 71 cents to $101.70 per barrel, while the contract for sweet light crude (WTI) traded in New York rose by 71 cents to $94.11 per barrel.