by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected to open on a cautious rebound on Monday but the session could be again dominated by the wait-and-see attitude, with US inflation figures due on Tuesday and monetary policy decisions from the Federal Reserve ( Fed) Wednesday.

Futures contracts on indices suggest an increase of 0.40% for the CAC 40 in Paris, 0.41% for the Dax in Frankfurt, 0.43% for the FTSE 100 in London and 0.40% for the EuroStoxx 50.

Equity markets have been moving cautiously since last week, with little change, due to the imminence of announcements from several major central banks.

In addition to the Fed, which begins a two-day monetary policy meeting on Tuesday and will publish its decision on Wednesday, that of the European Central Bank (ECB) is expected on Thursday and that of the Bank of Japan (BoJ) on Friday.

Last week, the central banks of Australia (RBA) and Canada (BoC) surprised investors by opting to raise their respective key rates while a status quo was expected. On Sunday, the President of the Swiss National Bank (SNB), Thomas Jordan, warned that “the fight against inflation was not yet over”, saying that he could not rule out further monetary tightening on June 22.

Citi strategists believe that the Fed could be tempted to follow in the footsteps of the RBA and the BoC by recognizing that an increase in the cost of credit is still necessary to fight inflation.

Regarding the Fed, market participants expect a pause this month before a further increase in July. The ECB, meanwhile, is expected to continue its tightening with another 25 basis point rate hike on Thursday, while in Japan, the BoJ is expected to persist with its ultra-accommodative policy.

As for US macroeconomic indicators, after recent mixed data showing in particular a drop in inflationary pressures and a slowdown in activity, the consumer price statistics (CPI) for the month of May, scheduled for Tuesday, are particularly awaited. The Reuters consensus on the CPI calls for flat month-on-month and a deceleration to 5.3% year-on-year.

The same day will be published the final German inflation figures for the month of May before those for the whole of the euro zone on Friday.

UBS announced Monday that it has completed the acquisition of Credit Suisse, thus creating a banking giant with in particular 5,000 billion dollars in assets under management.

AT WALL STREET

The New York Stock Exchange, backed by Tesla, ended Friday up slightly, with the S&P-500 and the Nasdaq reaching session highs since the start of the year.

The Dow Jones Industrial Average gained 0.13%, or 43.17 points, to 33,876.78 points.

The broader S&P-500 gained 4.93 points, or 0.11%, to 4,298.86 points.

The Nasdaq Composite, with a strong technological component, advanced for its part by 20.62 points (0.16%) to 13,259.14 points.

Over the week, the Dow gained 0.34%, the S&P 0.39% and the Nasdaq 0.14%. This is the fourth consecutive week of increases for the S&P, which had not happened to it since last July-August, and the seventh for the Nasdaq, a series not seen since October-November 2019.

Wall Street has been buoyed for several weeks by a return of investors to large-cap tech, a better-than-expected quarterly earnings season and the prospect of the Fed pausing in its monetary tightening, despite mixed macroeconomic indicators hovering. the threat of a recession in the United States.

Tesla gained 4.06% after announcing an agreement with General Motors (+1.06%), which will in turn adopt the charging system for electric vehicles from the manufacturer led by Elon Musk, whose network could become the norm in the United States.

Netflix gained 2.6% following reports from the Wall Street Journal that the online video specialist saw its subscriptions soar after its restrictions on sharing passwords.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index advanced 0.33% to 32,371.22 points and the Topix, larger, took 0.64% to 2,238.52 points as the close approached.

In today’s indicators, wholesale inflation in Japan slowed in May for the fifth consecutive month, to 5.1% year on year, due to lower fuel and commodity prices, a sign that the pressure on costs that have driven up consumer prices may subside.

The MSCI index comprising the values ​​of Asia and the Pacific (excluding Japan) lost 0.17% to 519.96 points after hitting a peak of more than a month and a half on Friday, at 521.94 points.

In China, the Shanghai SSE Composite gained 0.06% and the CSI 300 gained 0.3%.

EXCHANGES/RATES

The dollar is stable (+0.06%) on Monday against a basket of benchmark currencies but traders remain on their guard before the Fed’s decisions. The US dollar index posted a loss of almost 0.5% last week, its worst weekly decline since mid-April.

The euro is displayed at 1.0742 dollars (-0.05%) and the pound sterling at 1.2571 dollars (+0.02%).

In the bond market, the yield on ten-year US Treasuries was virtually unchanged at 3.7588% after rising 3.1 basis points on Friday.

OIL

The oil market, which on Friday posted a second consecutive weekly decline, lost further ground on Monday. The black gold suffered from questions about the Fed, concerns about Chinese demand and the increase in crude oil exports from Russia to China and India.

Brent fell 1.2% to 73.89 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.23% to 69.31 dollars.

(Written by Claude Chendjou, edited by Tangi Salaün)

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