(New York) Falling oil, rush on government bonds, euro/dollar parity: investors avoided taking too much risk on the markets on Tuesday, before several important publications.
Updated yesterday at 12:22 p.m.
The European indices are clearly back in the green at the end of the session. At the close, Paris gained 0.80%, Frankfurt 0.57% and London 0.18%.
On Wall Street, the Dow Jones lost 0.62%, the tech-dominated NASDAQ index fell 0.95%, and the broader S&P 500 index fell 0.92%.
“In days of waiting like this, the European markets are linked to the American markets”, which have recovered a little from the first estimates of the day, notes Florian Allain, manager at Mandarine Gestion.
But the event of the day for the brokers is the parity briefly touched between the euro and the dollar, after several weeks of fall of the euro. This threshold had not been reached since 2002, the year it was put into circulation.
Ahead of major releases, including U.S. inflation numbers on Wednesday or the kickoff of corporate earnings season, “investors again retreated to the safety of the U.S. dollar, moving away from assets risky in favor of safe havens,” described Oanda analyst Craig Erlam in a note.
The single currency fell to just one dollar at 09:46 GMT, before starting a rebound. At 8:50 p.m. GMT, it was trading at 1.0037 dollars, close to equilibrium compared to Monday.
The dollar is strengthened by the tightening of monetary policy in the United States and by fears about growth in Europe, which has also suffered for several days from the threat of a disruption in the supply of Russian gas.
This climate of risk aversion eased rates on the bond market, which move in the opposite direction to prices.
The yield on the 10-year US government bond was 2.97%, remaining below that for the two-year bond (3.04%). The spread between the two yields has even reached its highest level for 15 years, their inversion (short rates are normally lower than long rates) often being interpreted as a harbinger of a recession.
WTI and Brent plunge back below $100
The barrel of Brent oil from the North Sea closed on Tuesday below 100 dollars for the first time in three months, in a market that only has recession in mind, which would wipe out part of the demand for black gold .
The price of Brent for September delivery fell 7.10%, to end at $99.49, while the barrel of American West Texas Intermediate (WTI), with August maturity, lost 7.92%, to $95.84.
New taxes on oil and banks in Spain
The Spanish government announced on Tuesday an exceptional tax on the profits of large energy and financial groups in order to offset the cost of the support measures put in place in recent months in the face of soaring inflation.
In Madrid, Banco Sabadell fell by 7.44%, Caixabank by 8.63%, Santander by 3.65%. The oil group Repsol fell by 5.73%.
Other banks in Europe were down sharply, notably in Italy with Banco BPM (-2.48%) and Unicredit -1.97%.
BASF finds the formula for the second quarter
The German chemical giant (+3.32%) published second-quarter net profit on Monday, exceeding expectations thanks to higher prices, before the Russian gas crisis threatens to penalize the entire sector. From April to June, net profit group share reached 2.09 billion euros, against estimates of 1.4 billion euros, according to preliminary results announced ahead of schedule.
On the bitcoin side
Bitcoin was down 5.05% at $19,435 around 8:50 p.m. GMT.