The European indices are guarding against any haste before the long Easter weekend. ipopba / stock.adobe.com
Pending a key US jobs report, investors are booked ahead of the Easter weekend.
Recession fears weigh on Asian markets and Europe on Thursday as investors calmly wait for a key US jobs report that could guide the US central bank on interest rates.
In Asia, Tokyo dropped 1.22%, Shanghai ended in equilibrium and Hong Kong lost 0.34% around 07:15 GMT. The European indices are keeping their rush ahead of the long Easter weekend and the publication of the monthly US employment report on Friday, a public holiday for the markets. Around 07:25 GMT, Paris took 0.21%, Frankfurt 0.19% and London 0.43% the day after a negative session.
Recession fears
Since the start of the week, several statistics illustrating the economic slowdown in the United States have fueled fears of recession, with investors wondering if the American central bank has not gone too far in monetary tightening in order to fight inflation. . “It seems the markets want to believe that the economy is slowing down, which it likely is, that the recent rate hikes are to blame and that the Fed will soon have to change its monetary policy stance.», analyse Michael Hewson pour CMC Markets.
While they had been hoping for months for signs of easing in the American labor market and an economic slowdown to foresee an imminent end to the cycles of rate hikes by the Federal Reserve (Fed), investors are now worried about the health of the world’s largest economy. Weaker-than-expected private job creation in March and above all the stronger-than-expected slowdown in activity in services (ISM) published on Wednesday in the United States are raising fears because they pose a risk of contraction .
According to experts, the next few days’ data on jobs and inflation will be decisive in determining whether or not the US central bank (Fed) will raise its key rate by another 25 basis points at its next meeting in May. But according to Mr. Hewson, given inflation that remains high, do not expect a hasty pivot from the Fed to lower its rates, a pattern in which the markets are currently taking pleasure.
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More positive news
Elsewhere, the news is more positive: in China, activity in services experienced its strongest acceleration in more than two years in March after the abandonment of health restrictions against Covid. But this good news for investors was offset by geopolitical tensions in Asia-Pacific, against the backdrop of the visit to California by the President of Taiwan.
In Germany too, the risk of a recession is receding: after the sharp rise in industrial orders and the jump in exports in February, industrial production rose more than expected in February. For its part, the central bank of India surprised the markets by keeping its key rate unchanged at 6.5% on Thursday, after six successive increases since May 2022, citing “unprecedented uncertainty» the geopolitical context and the financial markets.
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On the side of currencies and oil
The yen was stabilizing against the dollar, which was trading at 131.31 yen for a greenback around 0715 GMT against 131.32 yen on Wednesday at 2100 GMT. The euro gained 0.10% against the dollar, to one euro for 1.0915 dollars.
The oil market was in the red: around 07:15 GMT, the barrel of American WTI yielded 0.53% to 80.20 dollars, and the barrel of Brent from the North Sea fell by 0.51% to 84.69 dollars .