by Laetitia Volga

PARIS (Reuters) – Wall Street is expected with no clear direction on Monday as indices in Europe rise cautiously mid-session, with rising oil prices supporting sector stocks while rekindling inflation uncertainties.

Futures on New York indices signal an opening of Wall Street up 0.3% for the Dow Jones, almost stable for the S&P-500 and down 0.6% for the Nasdaq. In Paris, the CAC 40 gains 0.47% at 7,356.73 around 10:45 GMT. In Frankfurt, the Dax takes 0.05% and in London, the FTSE 0.79%.

The pan-European FTSEurofirst 300 index rose 0.15%, the Eurozone EuroStoxx 50 0.24% and the Stoxx 600 0.13%.

Oil prices have so far posted their strongest daily increase in a year: Brent rose 5.06% to 83.93 dollars a barrel and US light crude 5.21% to 79.61 dollars.

This performance stems from the unexpected decision by OPEC+ to further cut production, by more than a million barrels per day from May, in order, according to producing countries, to maintain the stability of the oil market.Observers s wonder about the impact of this surge in energy prices on inflation and whether it is able to encourage central bankers to continue the rise in interest rates longer than expected, provided that there is no new turmoil in the banking sector.

Traders are pricing the likelihood of monetary tightening at 60% in May, down from around 48% on Friday, according to CME Group’s FedWatch Barometer.

“It will take some time to see precisely where the price of oil is moving and how that impacts global prices,” SPI Asset Management said. “Nevertheless, this announcement may cause inflation to accelerate as falling energy prices are the main driver of disinflation this year.” VALUES TO WATCH ON WALL STREET

VALUES IN EUROPE

Oil stocks are driving the equity markets higher: the Stoxx oil and gas index is up 3.8%; TotalEnergies, BP, Shell and Eni gain from 3.8% to 4.64%.

Rising bond yields are supporting the rebound in the banking sector. In Paris, Credit Agricole, BNP Paribas and Societe Generale take from 1.56% to 3.30%, among the highest increases in the CAC.

“A higher oil price is obviously good news for energy producers and the idea that this could lead to higher interest rates is good news for banks, with higher rates allowing them to earn more money easily,” said Stuart Cole, chief macroeconomist at Equiti Capital.

“But elsewhere, it’s not so good news because tighter monetary policy will weigh on demand, which could reduce spending.”

Against the current, UBS dropped 3.68%, the Swiss Federal Prosecutor’s Office having opened an investigation into the takeover of Credit Suisse.

RATE

Yields on US government bonds are rising with the increased probability of a rise in the “fed funds” rate target in a month: the two-year takes more than three basis points to 4.0978% and the ten years at 3.5185%.

The yield of the ten-year German Bund, the benchmark in Europe, gained around two points to 2.327%.

CHANGES

After taking up 0.54% in session, the dollar is unchanged against other major currencies.

The euro, benefiting from the stabilization of the dollar, rises to 1.0867.

MAIN ECONOMIC INDICATORS ON THE AGENDA OF THE DAY

COUNTRY GMT INDICATOR PERIOD PREVIOUS CONSENSUS

USA 2:00 p.m. ISM manufacturing index March 47.5 47.7

(Laetitia Volga, edited by Blandine Hénault)

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