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European stocks were lower on Monday as traders took a cautious stance ahead of a number of central bank policy decisions this week.
“We could see final rate hikes from the BoE and the SNB, while the Fed has probably already done so but has not yet explicitly indicated it, and the BOJ could be about to start, but probably not,” OANDA said.
“It goes without saying that this could be a catastrophe for the markets.”
Stocks to watch
Renault is not receiving the positive attention it deserves from the market, Bernstein said, noting that the automaker’s sales momentum in its most important markets improved in August after a strong performance in July. Bernstein now forecasts Renault’s 2023 adjusted operating margin at 8.2%, which is above the company’s high-end target of 8%. Learn more.
Economic overview
The German economy is unlikely to emerge from its current malaise for some time, Commerzbank Research said. Forecasts from economic institutes remain too optimistic, pinning their hopes on a recovery from the end of this year, with inflation slowing and wages rising, he said. Learn more.
American markets:
Yields on stock futures and Treasuries rose slightly, after a collapse in technology companies on Friday weighed on the broader market.
Airbnb and Blackstone are expected to join the S&P 500 before the market opens Monday as part of a quarterly rebalancing. The companies will replace Lincoln National and Newell Brands.
Movers before marketing
Shares of Ford and General Motors cautiously climbed after negotiations resumed between the Big Three automakers and the UAW union over the weekend.
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Forex:
The recent rise in eurozone bond yields has triggered increased foreign investor flows into eurozone debt markets, which could provide structural support to the euro against the dollar this year, a said BNP Paribas Markets 360. This could explain why the euro has held up well, even in the face of negative news from the eurozone.
“While rising energy prices pose a risk to the euro, it is unlikely to be enough to significantly depress EUR/USD, in our view.”
Metzler said he expects the euro to end the year at $1.06, before rising to $1.07 and then $1.08 in the first and second quarters of 2024, respectively.
“THE [U.S.] “The U.S. economy is weakening, but then it continues to surprise on the upside, not only in the U.S. labor market, but also, even recently, with retail sales,” Metzler said. “In addition, US inflation has reached its lowest point for this year and is expected to trend upward again in the remaining months.”
Read Sterling could weaken against the euro ahead of BOE rate decision
Read Medium-term dollar outlook looks weaker
Obligations :
Greek government bonds slightly outperformed their euro zone counterparts after Moody’s upgraded Greece two notches to Ba1 with a stable outlook on Friday.
“This two-notch upgrade reflects Moody’s view that the Greek economy, public finances, institutions and banking system are experiencing profound structural changes that will support continued improvement in credit indicators and resilience to potential future shocks ” Moody’s said. Learn more.
Energy:
Oil futures rose after posting their third consecutive weekly gain, as the market is expected to head into a deep deficit.
Saudi Arabia’s production cut of a million barrels per day, as well as its plan to extend those cuts until the end of the year, appears to be helping to push up prices.
ANZ estimates the oil market will see a supply shortfall of 2 million barrels per day this quarter thanks to cuts and growing demand in China.
Metals:
Base metals rose slightly overall, although traders remained cautious about the outlook for China’s real estate sector.
More positive Chinese data led some Western investors to increase their bullish bets on copper, but that was quickly countered by Shanghai traders who took profits, TD Securities said.
“This highlights the still fragile environment for industrial metals. Indeed, weakness in the real estate market has persisted [China] despite stronger data, and looking ahead, we see little evidence of a change in the red metal’s recent dynamics. »
DOW JONES NEWSPLUS
EMEA NEWS
Naspers and Prosus CEO resigns
Bob van Dijk has resigned as chief executive and board member of Naspers and its Prosus unit, after leading the South African internet and media conglomerate for more than nine years.
Naspers did not give a reason for the change, which was mutually agreed and came into effect on Monday. Ervin Tu, the group’s chief investment officer, was named interim CEO and said van Dijk would help with the management transition and remain a consultant until the end of September 2024.
Societe Generale expects revenue growth to slow until 2026
Societe Generale targets slower average annual revenue growth between 2022 and 2026 than for the 2021-25 period, and aims to streamline its portfolio and reduce its exposure to oil and gas as part of a new strategy.
The French bank presented on Monday its new strategic plan for 2026 which, according to its general director, Slawomir Krupa, will strengthen the group with a simplified portfolio of activities. The bank intends to focus on its core franchises in the future, it said.
Departure of Lonza CEO Pierre-Alain Ruffieux
07:13 GMT – News of Lonza Group CEO Pierre-Alain Ruffieux’s abrupt departure is unlikely to be welcomed and will not help boost confidence ahead of next month’s financial markets day, analyst said by RBC Charles Weston in a research note. . “While the two recent downward revisions to expectations mean that some investors were uncertain about Mr. Ruffieux’s performance and could therefore potentially view this as a positive, the CEO’s unexpected and abrupt departure is unlikely to provide confidence to the market heading into next year. [capital-markets day on Oct. 17]while we expect new mid-term targets to be announced,” RBC said. A positive day in capital markets was needed to drive a rally in the Swiss life sciences company’s shares, said RBC ([email protected])
UK house prices rise month-on-month, but below usual annual trend
The average house price in the UK increased by 0.4%, or 1,386 pounds ($1,720) in the month to September 9, lower than normal for this period of the year. year, according to new data from Rightmove published on Monday.
The average price of properties placed on the market increased over the month to £366,281, lagging behind the usual rise of 0.6% for the month, the online property portal said. On an annual basis, house prices fell 0.4%, following a 0.1% drop in August and the biggest fall since March 2019.
WORLD NEWS
Is China’s economic situation as serious as Japan’s? It could be worse
HONG KONG – Since the 1990s, Japan has become synonymous with economic stagnation, as the boom gave way to sluggish growth, population decline and deflation.
Many economists say that today’s China resembles it. The reality: In many ways, its problems are more intractable than Japan’s. China’s public debt levels are, in some respects, higher than Japan’s and its demographics are worse. The geopolitical tensions China faces go beyond the trade frictions Japan once faced with the United States.
Worsening Housing Crisis Threatens China’s Economy
China’s real estate giant is plunging into a new crisis that threatens to be the worst the country has ever known.
Two years ago, debt-ridden developer China Evergrande Group fell into insolvency, bursting the country’s real estate bubble and setting off a chain of defaults and business losses. The industry’s difficulties have weighed on the Chinese economy.
Republican groups develop short-term bill to keep government open
Two major House Republican groups have crafted a short-term funding proposal to prevent a government shutdown, working to break the impasse in their party ahead of in-depth negotiations with Democrats to keep the government funded at – beyond September 30.
The proposal unveiled Sunday by leaders of the far-right Freedom Caucus and the more centrist Main Street Caucus contains deep spending cuts and a border security provision that will make the legislation a nonstarter in the Democratic-controlled Senate . But the proposed one-month extension indicates that House Republicans are scrambling to find a way to fund the government once the current fiscal year ends, after efforts to pass legislation last week were blocked amid conservative protests.
Ukraine seeks cash as fighting drains its coffers
The war in Ukraine is cruel, but also costly.
The counter-offensive aimed at driving out the Russian occupiers from its southern region is getting bogged down. Facing another year of fighting – and a budget deficit of more than $40 billion in 2024 – Kiev’s finance officials are looking for money to keep the war economy running.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
September 18, 2023 at 5:50 a.m. ET (09:50 GMT)
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