European shares fall in view of US debt limit and ECB

If this is the case

the market is waiting for it today US President Biden will meet with Republican and Democratic leaders of the US Congress To deal with the increase in the credit limit. “Until this issue is resolved, European and US stock markets will not be able to recover the upward trend, there is a real risk that if no agreement is eventually reached, a scenario we Haven’t considered yet, there will be a drastic correction in the stock markets”, underlines the Link Securities analysis team.

In the early stages of the session, the DAX fell 0.25% to 15,878.11 points, the CAC 40 declined 0.29% to 7,396.77 units, the FTSE 100 0.13% and the Italian FTSE MIB 0.19%. For its part, the euro STOXX 50 declined 0.21% to 4,307.35 points. IBEX 35 closed at 9,181.40 points with a gain of 0.22%.

Whereas, Today’s macroeconomic agenda is intense, and that started with a flurry of data this morning in China. Growth in industrial production and retail sales in China came in below forecasts in April, suggesting the economy lost momentum early in the second quarter and putting pressure on policymakers to ease a faltering recovery after the effects of COVID-19. Poured.

With these data, markets expect country leaders to try to shore up the economy and ensure that business confidence recovers and growth becomes more sustainable, said Kerry Craig, global market strategist at JP Morgan.

In Eurozone will be published Second estimate of the region’s GDP for the first quarter of 2023as well as the ZEW Index for Germany for the month of May, an index that measures the sentiment that large investors and analysts have about the current and future state of the German economy and which are expected to decrease slightly with respect to their levels. are supposed to. Month of April

Britain’s unemployment rate unexpectedly rose to 3.9% In the three months to March, as the number of people willing to re-enter the labor market rose, that could ease the Bank of England’s concerns about inflationary pressures. Economists polled by Reuters had expected the rate to stay at 3.8%.

“Employment and unemployment are both set to rise again in the first three months of 2023, driven particularly by men,” said Darren Morgan, director of economic statistics at the Office for National Statistics (ONS).

“This means that the number of people neither working nor looking for work has continued to fall, although the number of people out of work due to long-term illness has risen again to a new record “

in the afternoon and America statistics of april retail sales, as well as industrial production for the same month. Analysts expect significant progress in the first variable and stagnation in the second in the above month. “The worse-than-expected data could reactivate fears among investors that this economy is headed for a new recession, a hypothesis we do not share, at least in the short term (it could be another one in 2024). story)”, say analysts from Outside, Link Securities.

Another focus remains on the ECB

He The European Central Bank will raise its interest rates by 25 basis points in each of the next two meetings.According to economists polled by Reuters, many of whom also said the biggest risk was that rates would rise further in the future.

several ecb monetary leaders He has reiterated that the central bank may have to raise interest rates for a longer period of time than before until core inflation shows significant signs of slowing.

The ECB, which cut its rate by 25 basis points after a series of 75 and 50 basis point hikes at its May meeting, is likely to raise its rate again, according to a survey of 62 economists conducted between May 10 and 15. hopefully. a quarter of a percentage point the following month, at 3.50%.

In recent days, at least seven senior managers in Barclays’ technology, media and telecommunications (TMT) investment banking have resigned to join UBS Group AG in the United States, according to people familiar with the matter.

These changes link a trio of US investment bankers Barclays vs UBS announced that they had hired last month. They point out how UBS is strengthening its talent pool in the US, even as it is about to inherit Credit Suisse Group AG’s investment banking group following a Swiss state-orchestrated takeover in March. Many Credit Suisse bankers operate in the United States.

Besides, Morgan Stanley considering 7% cut in your investment banking template in Asia-Pacific and China The country will be the most affected, Bloomberg News reported on Tuesday, which based its information on people close to the process.

Bloomberg News said the bank could begin contacting affected employees this week, and that more than 40 jobs are at risk, including those in the capital markets unit.

In the commodity market, Brent futures were down 0.16% at $75.11 and West Texas futures were down 0.15% at $71.00. (oil futures)

For its part, the euro was cut 0.05% at 1.0869 EUR/USD.