by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected on a cautious note at the opening on Wednesday before the publication of inflation figures in the United States and the first results of companies for the period January-March.

According to the first indications available, the Parisian CAC 40, which registered a historic record at 7,403.67 points on Tuesday, should lose 0.02% on Wednesday at the opening. The Dax in Frankfurt could nibble 0.03%, while the FTSE 100 in London should yield 0.09%. The EuroStoxx 50 index is expected to fall by 0.14%.

After the monthly report on employment in the United States, published on Friday, investors expect this Wednesday, at 12:30 GMT, the US consumer price statistics (CPI) for the month of March. The Reuters consensus forecasts a deceleration in the CPI to 0.2% over one month and 5.2% over one year. The “core” CPI index, the most followed by the American Federal Reserve (Fed), is expected to slow down by 0.4% after 0.5% the previous month, but over one year it could have accelerated to 5.6 % against 5.5% previously.

In addition to this statistic, the market will take notice on Thursday of producer prices (PPI) in the United States and final consumer price figures in Germany for the month of March.

Investors also have their eyes on the results of companies for the first quarter which start this week, with in particular in the luxury sector LVMH on Wednesday, followed by Hermès on Thursday and the major American banks on Friday.

Analysts expect S&P-500 companies to report quarterly earnings down 5.2% year-on-year, down from 1.4% growth previously expected at the start of the year, according to Refinitiv data.

“Investors are waiting for important events – CPI, PPI and the banks that will publish their results”, summarizes Randy Frederick, director of trading and derivatives at Charles Schwab.

“If the Fed gets to a point where it just keeps rates steady, markets can potentially do well. What worries me is that if the Fed continues to tighten (monetary conditions), it will continue create tensions for some banks,” he added.

The minutes of the March 21 and 22 meeting of the Fed, scheduled for 6:00 p.m. GMT, will perhaps provide some information on the path of rates and the impact of the banking stress observed last month.

AT WALL STREET

The New York Stock Exchange ended in mixed order on Tuesday, with only the Dow Jones ending in the green amid a wait-and-see attitude linked to US inflation data and the start of the earnings season.

The Dow Jones Industrial Average gained 0.29%, or 98.27 points, to 33,684.79 points.

The broader S&P-500 lost 0.17 points, marginally lower, to 4,108.94 points.

The Nasdaq Composite fell for its part by 52.48 points (0.43%) to 12,031.88 points.

Sensitive to changes in the economy, sectors such as industry and transport carried the Dow Jones, while the Nasdaq and the S&P-500, once on the rise, fell into the red at the end of the session.

Wall Street briefly racked up gains in the afternoon after Chicago Fed Chairman Austan Goolsbee urged caution and warned that the US central bank should be careful not to be too aggressive in its hikes interest rates to curb inflation.

Note, on the value side, the jumps between 6% and 17% of players in the cryptocurrency sector such as Coinbase Global, Riot Platforms and Marathon Digital against a backdrop of the rise in bitcoin.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index advanced 0.58% to 28,085.9 points and the Topix, larger, took 0.72% to 2,006.17 points as the closing approached. The indices, which are heading for a fourth consecutive session in the green, are supported by signs of an increase in consumption in department stores and the prospect of an increase in investments by American billionaire Warren Buffett in the archipelago.

In China, the SSE Composite of Shanghai takes 0.42% and the CSI 300 nibbles 0.05%.

The MSCI index comprising stocks from Asia and the Pacific (excluding Japan), however, fell by 0.17%.

VALUES TO FOLLOW IN EUROPE:

CHANGES

The dollar varied little on Wednesday (-0.069%) against a basket of benchmark currencies pending US inflation.

The euro rose 0.15% to $1.0926 after hitting a one-week low on Monday.

Bitcoin, which peaked at a 10-month high of $30,438 on Tuesday amid rising risk appetite, is trading at $29,983.7 (-0.7%) on Wednesday.

RATE

Ten-year and two-year US Treasury bond yields were broadly stable at 3.4374% and 4.0497%, respectively.

OIL

Oil prices are virtually unchanged ahead of US inflation data which could weigh on interest rates, the dollar and ultimately demand.

Brent climbed 0.04% to 85.64 dollars a barrel and US light crude (West Texas Intermediate, WTI) also 0.04% to 81.56 dollars.

(Written by Claude Chendjou, edited by Matthieu Protard)

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