by Laetitia Volga

PARIS (Reuters) – The main European stock markets are reported without much change on Tuesday at the opening, pending announcements from the Federal Reserve and the European Central Bank.

Futures contracts on indices point to a decline of 0.03% for the CAC 40 in Paris, an increase of 0.13% for the Dax in Frankfurt, 0.2% for the FTSE in London and 0.12% for the EuroStoxx 50.

Investors are widely expecting the Fed to announce a quarter-point rate hike after its monetary meeting on Wednesday. They will be especially attentive to possible comments on the future trajectory of its monetary policy while a status quo of the central bank of the United States is anticipated.

The ECB should also raise its rates on Thursday, for the seventh consecutive time, but the probability of an increase of 50 basis points cannot be ruled out, as Isabel Schnabel, member of the executive board, recently reminded us.

In Australia, the RBA defied market expectations by raising its key interest rate by half a point and hinting that its monetary tightening could continue in the face of inflation.

The rest of the day will be animated by, among other things, the latest PMI indices on manufacturing sector activity in the euro zone, a first estimate of inflation in the monetary union in April and the ECB’s monthly data on loans. business banking.

In Germany, retail sales fell unexpectedly in March, down 2.4% against +0.4% expected by the Reuters consensus.

SEE ALSO: CHARTS-Five questions for the ECB ahead of Thursday’s meeting

VALUES TO FOLLOW:

AT WALL STREET

Wall Street ended stable on Monday pending the Fed meeting.

The Dow Jones lost 0.14% to 34,051.7, the S&P-500 0.04% to 4,167.87 and the Nasdaq Composite 0.11% to 12,212.60.

JPMorgan gained 2.1%. The first American bank will pay $10.6 billion to the Federal Depositors Guarantee Fund to take control of most of the assets of the bankrupt bank First Republic.

“Hopefully the banking crisis is over, but other issues may arise at some point,” said Tim Ghriskey at Ingalls & Snyder.

The KBW banking sector index fell 2.7%.

IN ASIA

After having recorded a peak since January 2022, the Nikkei on the Tokyo Stock Exchange (+0.12%) reduced its gains, slowed down by the decline in financial stocks.

Stock markets in China are closed on the Labor Day holiday.

Hong Kong’s Hang Seng index changed little, as the announcement of an unexpected contraction in Chinese manufacturing activity in April fueled concerns about the country’s economic recovery.

CHANGES

The dollar fell very slightly against the other major currencies (+0.55%) after rising the day before to its highest level in nearly two weeks thanks to the rise in the ISM manufacturing index.

The euro is little changed around 1.0989 dollar.

The Australian dollar jumped 1.19% after the unexpected hike in the RBA’s key rate.

“In my view, the RBA feels it needs its key rate to be at least 4% before considering a pause in its rate hike cycle,” said Ray Attrill at National Australia Bank. “It is very likely that another hike is planned, but it remains to be seen whether it will take place as early as June.

RATE

In the European bond market, which is reopening after a long weekend, the German ten-year is up sharply after JPMorgan bought most of the assets of First Republic Bank.

The yield on the Bund climbed ten basis points in early trading, to 2.414%.

Its American equivalent, which took off the day before with this information, is now down slightly to 3.5624%.

OIL

The oil market fell moderately in reaction to the contraction of the official Chinese manufacturing PMI and expectations of a rate hike in the United States.

Brent fell 0.28% to 79.09 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.3% to 75.43 dollars.

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