by Laetitia Volga
PARIS (Reuters) – Wall Street is expected to open slightly higher on Thursday before the publication of several macroeconomic data while European stock markets benefit more clearly from the progress made in avoiding a default in payment by the United States and the prospect of a pause in the Federal Reserve in its rate hikes.
Futures on New York indices signal an opening on Wall Street up slightly, by 0.05% for the Dow Jones, 0.24% for the Standard & Poor’s-500 and 0.18% for the Nasdaq .
In Paris, the CAC 40 gained 0.61% to 7,142.12 around 11:25 GMT. In Frankfurt, the Dax advances by 1.09% and in London, the FTSE by 0.34%.
The pan-European FTSEurofirst 300 index gained 0.7%, the EuroStoxx 50 in the euro zone gained 0.84% ​​and the Stoxx 600 0.69%.
After ending the month of June in the red, the world markets approach June with more enthusiasm thanks to positive progress on the subjects which were sources of concern just a few hours ago.
In the thorny file of the debt ceiling of the United States, the House of Representatives approved with 314 votes against 117 the text on which Joe Biden and the Republican “speaker” of the House agreed after weeks of tense negotiations.
To avoid a payment default, it is now up to the Senate to vote on the text and send it to the American president for promulgation by Monday.
In monetary policy, fears of another Fed rate hike in two weeks were fueled on Thursday for an indicator suggesting continued strength in the job market.
However, two heads of the institution, Philip Jefferson and Patrick Harker, have indicated that it would be wiser to maintain the rate range of the “fed funds” at 5.00%-5.25% at the end of the meeting of June 13 and 14 and thus give themselves some breathing room to assess the impact of monetary firming.
To do this, the statistics expected before the bell – the ADP survey on private employment, the ISM manufacturing activity index and jobless claims – and especially the monthly report from the Department of Labor on Friday will be closely watched.
The news concerning the Chinese economy was also better on Thursday: the Caixin-Markit manufacturing PMI index surprisingly rebounded in May to return to growth in the wake of an acceleration in production and demand.
In pre-open U.S. trading, Salesforce was down more than 5% after reporting the weakest quarterly sales growth in 13 years, driven by lower demand for cloud-based software offerings. “.
VALUES IN EUROPE
On the stock market in Europe, Remy Cointreau is stable (-0.28%), the spirits group having maintained its 2023-2024 outlook despite a stronger than expected increase in its operating profit over the previous financial year.
Casino lost 4.94% while the CEO of the distribution group is heard by the financial brigade as part of an investigation for price manipulation and insider trading in particular.
RATE
The yield on the 10-year Bund rose a little but is heading for a jump of 24 basis points over the week in reaction to the slowdown in inflation recorded in several countries of the euro zone.
“Even though inflation of course remains at a high level, the market breathes a sigh of relief. The policy of the European Central Bank is having an effect,” analysts at DZ Bank said.
The ten-year German rose to 2.293%, after falling the day before to its lowest level in about three weeks at 2.24%.
In the United States, the trend is similar: the yield on government bonds of the same maturity gained nearly three basis points, to 3.6637%.
CHANGES
On the currency side, the dollar fell 0.28% against a basket of benchmark currencies, as traders lowered their expectations of a US rate hike this month.
According to the FedWatch tool, markets are now pricing in about a 30% chance of the Fed raising rates by 25 basis points at its next meeting, up from nearly 52% a week ago.
OIL
Oil contracts are trending lower, due to an increase in US crude inventories announced by the American Institute of Petroleum (API).
Brent fell 0.55% to 72.2 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.57% to 67.7 dollars.
(Laetitia Volga, editing by Kate Entringer)
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