by Laetitia Volga

PARIS (Reuters) – The main European stock markets should open close to equilibrium on Tuesday in a market context still dominated by questions about the evolution of the economic situation and the monetary policy of the major central banks.

The first available indications give a gain of 0.03% for the Parisian CAC 40, 0.04% for the FTSE in London, 0.05% for the EuroStoxx 50 and a decline of 0.01% for the Dax in Frankfurt.

The European and US indices ended in the green on Monday thanks to cheap buying after suffering their worst weekly performance of the year last week.

Given the slow decline in inflation and the strength of economies, analysts have raised their expectations of where Federal Reserve and European Central Bank interest rates will peak and for how long. they will be kept there.

Futures are pricing in the Fed’s final rate to hit around 5.4%, implying at least three more hikes.

“The road to lower inflation will inevitably be volatile and episodes of recession still seem likely,” said Stéphane Monier at Lombard Odier. “Investors are now eyeing a scenario of continued growth and above-trend inflation.”

Among the indicators of the day is the first estimate of inflation in France in February that the Reuters consensus gives at 7.0% over one year, like last month, but in acceleration of 1.0% from one month. on the other.

AT WALL STREET

The New York Stock Exchange rebounded timidly on Monday, although investors remained concerned about the level of inflation and the prospect of longer-than-expected monetary tightening from the Fed.

The Dow Jones Industrial Average gained 0.22%, or 72.17 points, to 32,889.09 points, the broader S&P-500 gained 12.19 points, or 0.31%, to 3,982.24 points. and the Nasdaq Composite advanced 72.04 points (0.63%) to 11,466.98 points.

All three major Wall Street indexes opened more than 1% higher after last week’s tumble but quickly pared gains amid stronger-than-expected growth in factory orders in January confirming the scenario of further vigorous rate hikes by the Fed.

In values, Tesla gained 5.46%, the automaker having announced that its factory near Berlin was already producing 4,000 vehicles per week, three weeks ahead of schedule.

Pfizer, on the other hand, lost 2.32%, the laboratory being in discussions to buy the specialist in cancer treatments Seagen (+ 10.4%) for several billion dollars, according to the Wall Street Journal.

IN ASIA

The Japanese Nikkei index ended the day stable (+0.08%) and variations are also limited in China where the large cap CSI 300 lost 0.05%.

RATES/EXCHANGES

On the US bond market, the yield on ten-year Treasuries rose very slightly to 3.9356%.

On the foreign exchange side, after its decline on Monday, the dollar rebounded against a basket of reference currencies (+0.16%) and the euro returned to around 1.0585 dollars.

The pound is giving up some ground after jumping the day before in reaction to the announcement of an agreement between the United Kingdom and the European Union on the Northern Irish protocol.

OIL

Oil prices are relatively stable, between hopes of a solid rebound in the Chinese economy and concerns about further hikes in US interest rates.

Brent gained 0.27% to 82.67 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.37% to 75.96 dollars.

(Edited by Matthieu Protard)

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