Ramsey
19-09-2002, Thu 9:30 AM
عن دواوجونز نيوزواير
EUROPEAN OUTLOOK: Stocks May Open Steady In A Pause
Euro-USD 0.9777 gain 0.0005 up 0.04%
Stlg-USD 1.5493 loss 0.0003 dn 0.02%
USD-Franc 1.5016 loss 0.0018 dn 0.1%
ZURICH (Dow Jones)--European shares should open little changed as traders take a breather from losses, while prices of government bonds could get a trim and the euro stalls at higher levels.
STOCKS: European shares should open at least steady, with pockets of strength in oversold sectors that were battered by derivatives-related selling on Wednesday ahead of Friday's expiries.
European stocks sagged to near five-year lows Wednesday, as a brace of high profile profit warnings in the U.S. and some gloomy insurance sector news from Swiss Life sent equities across the region reeling.
CSFB, in a strategy note, said it was difficult to make the case that European equities will outperform the U.S., and that despite European stocks looking cheaper, increasingly it looks as though they should be. The investment bank said economic newsflow is as bad in Europe as in the U.S., value creation is lower and government liberalization has hit the buffers.
"On a more positive note, policy paralysis may not be as real as many feel. And if the ECB cuts rates as we expect and the market stays put, short rates this winter may dip beneath trailing equity dividend yields for the first time in recent memory. We believe this should provide absolute support for the equity market, even if it is unlikely to transform Europe's relative attractiveness," it said.
Looking ahead, traders said investors will continue to mull over developments regarding the situation in Iraq as well as Thursday's release of U.K. retail sales data for August and the U.S. Philly Fed survey and weekly jobless claims.
BONDS: Euro-zone government bonds may see some profit-taking on an initially lower move, but thereafter should hold fairly stable as the market assesses the chances of shares seeing more losses in coming sessions.
But prudent investors may avoid the long end of the spectrum on the view that yields have fallen enough for now. That strategy would make the short end more attractive for now.
Euro-zone government bond prices rose Wednesday as money deserted stock markets, which suffered heavy losses on fears that a war with Iraq is still in the cards.
"Weakness of stock markets and the drop in French industrial production boosted euro-zone bonds," said Nathalie Fillet, fixed-income strategist with BNP Paribas.
FOREX: The euro starts the session stalled just under $0.9800 after failing overnight to get over that level.
Among factors restraining the euro was a much weaker-than-expected July industrial output report in France, which "adds to the gloom over the euro zone's recovery prospects," said Marc Chandler, chief currency strategist with HSBC.
The market may turn instead to the dollar/Swiss franc for leads, because this pair often leads the dollars
EUROPEAN OUTLOOK: Stocks May Open Steady In A Pause
Euro-USD 0.9777 gain 0.0005 up 0.04%
Stlg-USD 1.5493 loss 0.0003 dn 0.02%
USD-Franc 1.5016 loss 0.0018 dn 0.1%
ZURICH (Dow Jones)--European shares should open little changed as traders take a breather from losses, while prices of government bonds could get a trim and the euro stalls at higher levels.
STOCKS: European shares should open at least steady, with pockets of strength in oversold sectors that were battered by derivatives-related selling on Wednesday ahead of Friday's expiries.
European stocks sagged to near five-year lows Wednesday, as a brace of high profile profit warnings in the U.S. and some gloomy insurance sector news from Swiss Life sent equities across the region reeling.
CSFB, in a strategy note, said it was difficult to make the case that European equities will outperform the U.S., and that despite European stocks looking cheaper, increasingly it looks as though they should be. The investment bank said economic newsflow is as bad in Europe as in the U.S., value creation is lower and government liberalization has hit the buffers.
"On a more positive note, policy paralysis may not be as real as many feel. And if the ECB cuts rates as we expect and the market stays put, short rates this winter may dip beneath trailing equity dividend yields for the first time in recent memory. We believe this should provide absolute support for the equity market, even if it is unlikely to transform Europe's relative attractiveness," it said.
Looking ahead, traders said investors will continue to mull over developments regarding the situation in Iraq as well as Thursday's release of U.K. retail sales data for August and the U.S. Philly Fed survey and weekly jobless claims.
BONDS: Euro-zone government bonds may see some profit-taking on an initially lower move, but thereafter should hold fairly stable as the market assesses the chances of shares seeing more losses in coming sessions.
But prudent investors may avoid the long end of the spectrum on the view that yields have fallen enough for now. That strategy would make the short end more attractive for now.
Euro-zone government bond prices rose Wednesday as money deserted stock markets, which suffered heavy losses on fears that a war with Iraq is still in the cards.
"Weakness of stock markets and the drop in French industrial production boosted euro-zone bonds," said Nathalie Fillet, fixed-income strategist with BNP Paribas.
FOREX: The euro starts the session stalled just under $0.9800 after failing overnight to get over that level.
Among factors restraining the euro was a much weaker-than-expected July industrial output report in France, which "adds to the gloom over the euro zone's recovery prospects," said Marc Chandler, chief currency strategist with HSBC.
The market may turn instead to the dollar/Swiss franc for leads, because this pair often leads the dollars