by Claude Chendjou
PARIS (Reuters) – Major European stock markets are expected to rise on Thursday on hopes of a deceleration in inflation in Germany as other leading macroeconomic data, such as U.S. gross domestic product (GDP) in the fourth quarter, are also on the agenda.
Futures contracts on indices suggest an increase of 0.61% for the CAC 40 in Paris, 0.69% for the Dax in Frankfurt, 0.44% for the FTSE 100 in London and 0.70% for the EuroStoxx 50.
After the recent strains on the banks, investors now have their eyes on the evolution of interest rates and the economic situation. They will take notice at 12:00 GMT of the data on consumer prices in March in Germany before those for the whole of the euro zone on Friday. The Reuters consensus expects HICP inflation to slow to 0.8% over one month and 7.5% over one year in Europe’s largest economy. The first inflation data in the German state of North Rhine-Westphalia show a deceleration to 0.6% over one month and 6.9% over one year against respectively +1.0% and +8.5 % in February.
Two officials of the European Central Bank, Peter Kazimir and Philip Lane, however estimated on Wednesday that the ECB should continue to raise its interest rates to contain the rise in prices.
In the United States, the expectation is for the final GDP figures for the last quarter of 2022, which should show growth of 2.7% at an annualized rate according to the Reuters consensus. This statistic includes the PCE price index, the preferred gauge of inflation by the US Federal Reserve (Fed).
Traders are currently pricing in a 42% chance of a 25 basis point Fed rate hike in May, according to CME Group’s Fedwatch Barometer.
“We will (probably) see the Fed end its (tightening) campaign at the May meeting because the recession is not far away,” said Peter Cardillo, chief economist at Spartan Capital Securities.
AT WALL STREET
The New York Stock Exchange ended higher on Wednesday as encouraging forecasts from several companies, including semiconductor maker Micron, eased investor fears about the economy, amid ongoing banking sector woes. the object of their attention.
The Dow Jones Industrial Average gained 1%, or 323.35 points, to 32,717.60 points.
The broader S&P-500 gained 56.54 points, or 1.42%, to 4,027.81 points.
The Nasdaq Composite advanced for its part by 210.16 points (1.79%) to 11,926.24 points.
Micron was very optimistic in its forecast for 2025, citing growth in sales related to artificial intelligence. The semiconductor maker’s stock rose 7.2%, dragging the Nasdaq and the S&P-500 in its wake.
Adding to the optimism, Lululemon Athletica said it expected a better-than-expected full-year profit, which caused its stock to jump 12.7%.
VALUES TO FOLLOW IN EUROPE:
On the Tokyo Stock Exchange, the Nikkei index ended with a loss of 0.56% to 27,728.57 points and the Topix, broader, fell 0.61% to 1,983.32 points.
In China, the Shanghai SSE Composite rose 0.49% and the CSI 300 gained 0.67%.
The MSCI index comprising stocks from Asia and the Pacific (excluding Japan) gained 0.3%, the third consecutive session in the green, in a context of easing fears about the banks. Alibaba’s reorganization also raises hopes that the storm over Beijing’s tightening of tech stocks is beginning to dissipate.
The dollar was almost unchanged on Thursday (-0.05%) against a basket of benchmark currencies, as traders awaited new macroeconomic data.
The euro is trading at 1.0835 dollars (-0.06%).
The yield on ten-year US Treasury bills is virtually stable at 3.5677% and the two-year one is at 4.0886%. The latter is expected to lose around 30 basis points over the whole quarter, the first decline since March 2020.
Ten-year and two-year German Bund yields fell 2.6 points to 2.27% and 3.9 points to 2.58%, respectively.
The oil market is almost stable after three consecutive sessions of increases linked to fears over supply following the suspension of crude oil exports from Iraqi Kurdistan.
Brent fell 0.03% to 78.30 dollars a barrel and US light crude (West Texas Intermediate, WTI) rose 0.16% to 73.09 dollars.
(Written by Claude Chendjou, edited by Bertrand Boucey and Kate Entringer)
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