by Laetitia Volga

PARIS (Reuters) – The main European stock markets are expected to show little change at the opening on Tuesday and investors should remain cautious pending the next steps for the adoption of an agreement to avoid a default on payment by States. -United.

The first indications available indicate an increase of 0.04% for the CAC 40 in Paris, 0.08% for the Dax in Frankfurt and a decline of 0.06% for the FTSE in London.

European markets opened on Monday ended slightly lower, as the relief caused by the provisional agreement reached between the White House and the speaker of the House of Representatives quickly gave way to uncertainty over the adoption of the text by a divided Congress.

The agreement could be considered as early as Wednesday by the House of Representatives.

“It’s still possible that the hardline Republicans will vote against the deal. The matter is not yet settled,” said Tai Hui, chief strategist at JPMorgan Asset Management. “The market is still waiting.”

Secretary of State for the Treasury Janet Yellen estimated last week that the country could default on its payment obligations by June 5 if elected members of Congress do not reach an agreement in time.

AT WALL STREET

Closed on Monday for Memorial Day, the New York Stock Exchange could open slightly higher on Tuesday, benchmark index futures report.

IN ASIA

After reaching a new 33-year high in Monday’s session, the Nikkei on the Tokyo Stock Exchange continued its march forward and gained 0.41%.

On the other hand, the Chinese markets are losing ground, still penalized by the weakness of the economic rebound. The official manufacturing PMI for May will be released on Wednesday and activity is likely to have contracted, according to a Reuters survey of economists.

The CSI 300 index fell by 1% and the Shanghai SSE Composite by 0.88%.

RATE

On the US bond market, closed Monday for a public holiday, the yield on ten-year government bonds lost more than six basis points, around 3.762%, operators welcoming the agreement in principle on the debt ceiling United States public.

CHANGES

The dollar rose slightly against a basket of benchmark currencies, close to the two-month high hit on Friday on expectations of a Federal Reserve rate hike next month.

Data on Friday showed a bigger-than-expected increase in household consumption in the United States and an acceleration in PCE inflation, which could lead the Fed to keep rates high for a while.

The euro is stable at 1.0687 dollars.

OIL

Fears of a rise in US interest rates and the maintenance by OPEC+ – which meets on Sunday – of an unchanged production target are weighing on the oil market.

Brent lost 0.57% to 76.63 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.4% to 72.38 dollars.

(Edited by Jean-Stéphane Brosse)

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