(Paris) European markets are without a clear direction on Monday after the release of business sentiment in Germany in June came out lower than expected, amid fears over the toughening tone last week from several bank spokespersons power stations.
Wall Street was heading for a lower open, according to futures for all three major indexes.
The European stock markets are moving in dispersed order: Paris gains 0.22% around 7:35 a.m. (Eastern time) while Frankfurt drops 0.15% and London is in equilibrium (0.01).
The only indicator expected on Monday was the IFO barometer of business sentiment in Germany in June which continued to fall as recession takes hold in Europe’s biggest economy amid falling consumption and struggling industry manufacturing.
The indicator fell 3.2 points to 88.5 points, down for the second month in a row, significantly lower than expected by Factset analysts, who had expected an IFO of 90.8 points.
Central banks continue to weigh on the markets. US Federal Reserve (Fed) Chairman Jerome Powell warned last week that further rate hikes were to be expected this year to try to contain inflation, while several central banks in Europe surprised markets with monetary tightening.
In addition, the European Central Bank (ECB) is holding its annual forum on the theme of economic stability in the face of high inflation until June 28, in Sintra, Portugal. The statements of the heads of the main central banks will again be watched by investors.
“Global activity seems to be slowing more markedly as summer approaches, as the rebound in activity in services is running out of steam and the economic situation outside the United States is deteriorating markedly”, observes Xavier Chapard, member of La Banque Postale AM’s research and strategy team.
This economic slowdown is taking place as “yield curves are the most inverted in forty years,” the analyst added, explaining that long-term interest rates are becoming lower than short-term interest rates.
“Inverted yield curves are one of the best leading indicators of recession,” he continues.
In the bond market, the yield on 10-year US government bonds stood at 3.68%, against 3.73% at the close on Friday, and the 2-year rate at 4.70%, against 4.74 %. In Europe, interest on the German 10-year bond stood at 2.29% around 7:35 a.m. EST from 2.35%.
Separately, this weekend’s Wagner episode “will likely remain largely ignored by investors unless there are new developments that could change the tide of the war in Ukraine,” analyst Ipek Ozkardeskaya said. from Swissquote.
Wagner’s leader, 62-year-old Yevgeny Prigojine, went into open rebellion against the Russian command on Friday night, before finally turning around.
British luxury carmaker Aston Martin on Monday announced “a strategic supply agreement” with U.S.-Saudi electric vehicle maker Lucid to create “ultra-luxury, high-performance electric vehicles,” according to a statement.
The announcement sent Aston Martin stock soaring 9.50% around 7:35 a.m. (Eastern time) on the London Stock Exchange.
Oil prices were up slightly, the gains caused by the mutiny of the paramilitary group Wagner in Russia remaining tempered by a sluggish economic context, unfavorable to global demand.
Around 7:30 a.m. EST, a barrel of Brent North Sea crude for August delivery was up 0.59% at $74.29.
Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery the same month, gained 0.49% to 69.50 dollars.
The euro climbed 0.10% to 1.0905 dollars.
Bitcoin fell 0.20% to $30,320.