Europe in the red, the Fed in the viewfinder


© Reuters. THE EUROPEAN stock markets DOWN AT OPENING

by Blandine Henault

PARIS (Reuters) – europe’s main stock Exchanges are changing down Monday in the morning, the wait-and-see dominant before the monetary policy decisions of the federal Reserve (Fed) in the u.s. on Wednesday.

In Paris, the CAC 40 index fell by 0.77% to 5.241,86 points to 09: 15 GMT. In Frankfurt, the Dax gives up 1.05% and in London, the FTSE yields 1,02%.

The index EuroStoxx 50 euro-zone decline of 0.76%, the FTSEurofirst 300 of 0.79% and the Stoxx 600 index of 0.74%.

For lack of an agenda more in charge in Europe, investors ‘attention is focused on the next meeting of the monetary policy committee (FOMC) of the Fed, at the end of which the central bank is expected to announce a new raising of a quarter-point fed funds rate”.

“It does not so much doubt that we will get a 0.25% increase to rates this week, however, some recent u.s. statistics have shown divergences in the economy,” said Michael Hewson, at CMC Markets, citing a strong employment report, but disappointing data on the consumer.

“This could affect how the Fed officials see the economy and it will be impossible to ignore the context of the current uncertain connected with a u.s. trade and policy,” he adds.

Investors décortiqueront including the “dot plot” projections of FOMC members on the future evolution of rates, which could confirm, or not, expectations of a monetary tightening faster than expected.

Regarding the risk of a trade war, raised by the recent attempts at protectionist Donald Trump, the operators of the market will follow the discussions between Finance ministers and central bankers from the G20 gathered this Monday and Tuesday in Buenos Aires.

On the foreign exchange market, the dollar is stabilizing in the face of a basket of reference currencies, but remained supported by the prospect of a new rate hike from the Fed. The euro hovers around 1,2275 dollar.

The yield on Treasuries to 10-year is back to more of 2.86% and pushing up bond yields in Europe. The German 10-year Bund evolves around 0,579%, compared to 0,57% at the end of Friday.

DIP MICRO FOCUS, HAMMERSON LEAPS

In spite of a calendar is lighter on the data front, the rating in Europe is led by a corporate news more provided.

At the head of the Stoxx 600, the specialist uk shopping centres Hammerson flies out of 26,24% to 551,80 pence after it rejected a bid by the French Klépierre (PA:LOIM) (-3,71%) the price to 615 pence per share.

The groups of betting uk Ladbrokes Coral (+3,315%) and William Hill (+4,555%) are supported by the publication of a report of the british Committee for the games requiring a bet limit of 30 pence for fixed odds betting, higher than that evoked up to now.

The bank Barclays (LON:BARC) rises 3,675% in reaction to the announcement of the entry in its capital of the investor activist Sherborne (2,347%).

Conversely, the british publisher of software Micro Focus plunged 50,523% after it announced the departure of its director general and the downward revision of its forecast of annual turnover, in particular due to issues related to activities redeemed at Hewlett Packard Enterprise (NYSE:HPE).

The German company Henkel (DE:HNKG_p) lose of 4.98%; the manufacturer of consumer products has reported beginning of the year was complicated by difficulties of delivery in North America.

In Paris, Nexans (PA:NEXS) fall of 6,23% after the announcement of the departure of its ceo, Arnaud Poupart-Lafarge, for personal reasons.

Among the largest declines in Europe, the sectors of basic resources (-1,81%) and oil and gas (-1,36%) suffer from the decline in commodity prices: a barrel of Brent gives up 0.6% at 65,84 dollars and that of the copper lost more than 1%.

(Edited by Marc Angrand)

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