Wednesday, August 4, 2021
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Updated on August 4, 2021 7:38 PM

European equities and U.S. equities futures tumble from peaks on pandemic nervousness

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LONDON – European equities and U.S. index futures fell on Wednesday, and global equities retreated from recent record highs as markets once again became nervous about the pandemic before the end of the half and before the Key US employment data later this week.

Asset markets have been boosted over the past year by trillions of dollars of monetary and fiscal stimulus from central banks and governments around the world in response to COVID-19, while vaccination deployments in recent months are boosting the economic outlook.

“The search for performance is a very powerful force. He doesn’t have the narrative right now to stop it, ”said Sebastien Galy, senior macroeconomic strategist at Nordea Asset Management.

But stocks trimmed some gains on the final trading day of the month and a half year, amid concerns about the most infectious Delta variant of the coronavirus first identified in India.

“At the end of the month there may be a rebalancing,” said Giuseppe Sersale, fund manager at Anthilia in Milan. “My impression is that there is fear about the impact of the Delta variant in the summer season in Europe.”

Indonesia, Malaysia, Thailand and Australia are fighting pandemic outbreaks and tightening restrictions, and Spain and Portugal announced restrictions for unvaccinated British tourists.

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European stocks fell 1% and US S&P futures fell 0.2%.

German stocks fell 1.4% and British stocks fell 0.67%.

However, the European benchmark, which hit all-time highs this month, is still on track to post its biggest percentage gain in the first half since 1998.

Eurozone inflation declined in June in line with forecasts, but is expected to move well above the European Central Bank’s target by autumn due to higher commodity prices.

The MSCI Global Stock Index fell 0.2%, but was set for a fifth consecutive month of gains, a day after hitting an all-time high, and for an increase of more than 11% in the first half.

US stocks remained bullish on Tuesday after US consumer confidence rose to its highest level in nearly 1 and a half years in June, with rising job market optimism as the economy reopens offsetting concerns about higher growth. inflation.

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EYES ON PAYROLL

Steven Daghlian, a market analyst at CommSec in Sydney, said that following the global rally in equities, markets were nervous ahead of Friday’s release of US nonfarm payroll data that could influence the policy of the company. Federal Reserve.

Economists polled by Reuters had expected a gain of 690,000 jobs for June, up from 559,000 in May, but the variation among the 63 estimates was large, between 400,000 and more than a million.

The dollar was heading for its best monthly gain since March, mainly on the back of a surprisingly aggressive change in the Fed’s rate outlook.

A “very optimistic” Fed governor, Christopher Waller, said Tuesday that he may need to start cutting his bulk asset purchase program as early as this year to allow the option of raising interest rates by the end of 2022. .

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The dollar index was up 0.04% to 92.102, the yen was up 0.01% to 110.51 and the euro was down 0.05% to $ 1.1891. The British pound was up 0.14% at $ 1.3854.

The benchmark 10-year US Treasury yield fell more than 2 basis points to 1.4578%, while the German 10-year government bond yield also fell 2 basis points to 1.4578%. -0.19%.

The MSCI index that tracks Asian stocks outside of Japan was set for a small monthly loss, but still on track for a fifth consecutive quarterly rise, its longest streak since 2006-07. The index was down 0.31%.

Chinese blue chips increased 0.65%. Japan’s Nikkei fell 0.07%.

Oil prices were heading for monthly and quarterly gains.

Brent crude rose 0.7% to $ 75.30 a barrel and US crude rose 1% to $ 73.73, after an industry report showed that US stocks fell last week.

Spot gold lost 0.19% to $ 1,754.73 an ounce, setting it up for its biggest monthly decline since November 2016.

(Additional reporting by Danilo Masoni in Milan and Andrew Galbraith in Shanghai; Editing by John Stonestreet and Alex Richardson)

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In-depth reports on the economics of innovation from The Logic, presented in association with the Financial Post.

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