(Reuters) – Wall Street is expected to rise on Wednesday and European stocks are in the green mid-session ahead of Federal Reserve decisions, as optimism takes over about a coming pause in the monetary tightening cycle. In Paris, the CAC 40 took 0.72% to 7,436.16 around 1125 GMT. In Frankfurt, the Dax gained 0.73% and in London, the FTSE 0.19%.

The pan-European FTSEurofirst 300 index advanced by 0.41%, the EuroStoxx 50 of the euro zone by 0.64% and the Stoxx 600 by 0.38%.

On Wall Street, index futures open up 0.12% for the Dow Jones, 0.21% for the Standard & Poor’s-500 and 0.22% for the Nasdaq

With markets almost certain that the Federal Reserve will announce a 25 basis point rate hike at 18:00 GMT on Wednesday, the focus will be on whether US central bank chairman Jerome Powell, who will address to reporters half an hour later, will confirm investors’ expectations for a pause in rate hikes by the end of the year.

In Europe, the European Central Bank (ECB) is also expected to announce a 25 basis point rate hike on Thursday, the tightening of bank credit in the euro zone and the slowdown in core inflation in April, two key indicators known the day before, arguing according to analysts for a limited increase.

The crisis of confidence in banks after the Credit Suisse debacle just over a month ago also argues for a softer approach from Frankfurt to avoid putting the sector in trouble.

“The market consensus is for a soft landing and every index in that direction, if you trust the Fed and the ECB, should be a source of good news for equities and credit,” said Florian Ielpo, Head of Macroeconomics at Lombard Odier Investment Managers.

THE INDICATORS OF THE DAY

On the indicators program, unemployment in the euro zone fell in March to 6.5% of the active population, according to official data published by the statistical office of the European Union.

In the United States, investors await the ADP survey on private employment at 1215 GMT and the ISM services index at 1400 GMT.

WALL STREET VALUES TO FOLLOW

VALUES IN EUROPE

On the Stoxx 600, the energy sector extended the losses suffered on Tuesday and dropped 1.03% with the fall in oil and fears over the economy.

As for the banks, whose sector lost 0.05%, UniCredit jumped 5%, the Italian group having raised its objectives for the year after publishing higher than expected profits for its first quarter.

In Paris, the manufacturer Stellantis, lost 1%, its inventories having increased during the period January-March due to logistical problems, and despite a 14% increase in its net turnover in the first quarter.

In Paris, BNP Paribas is stable (+0.2%) after the publication of its results, marked by a net profit multiplied by more than two.

In Amsterdam, Signify, the world’s largest lighting maker, fell 8.3% after missing quarterly profit expectations.

The German company Lufthansa fell 2% after its results fell short of expectations. The European travel sector fell with it by 0.25%

RATE

On the bond market, the ten-year German Bund yield was almost stable at 2.237%, while the American ten-year fell three basis points to 3.4069% before the Fed.

CHANGES

The dollar retreated on Wednesday on unfavorable US labor market data, US debt ceiling and banking sector fears. It yields 0.37% against a benchmark basket, while the euro takes 0.32% to 1.1034.

OIL

Oil prices fell further on Wednesday, after falling 5% in the previous session, as investors worried about the health of the U.S. economy ahead of the Fed’s interest rate decision.

Brent fell 2.9% to 73.10 dollars a barrel and US light crude (West Texas Intermediate, WTI) 3.17% to 69.4 dollars.

(Written by Diana Mandiá, Editing by Kate Entringer)

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