by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected to fall on Thursday at the opening in a context of fears over the trajectory of rates the day after the announcements of the American Federal Reserve (Fed) and before those of the European Central Bank (ECB). ) scheduled for the day.

Index futures suggest a decline of 0.35% for the CAC 40 in Paris, 0.37% for the Dax in Frankfurt, 0.34% for the FTSE 100 in London and 0.39% for the EuroStoxx 50.

The European Central Bank (ECB) is due to release its monetary policy decision at 12:15 GMT and analysts’ consensus expects the cost of credit to rise by 25 basis points, with the deposit rate at 3.50%.

Beyond the June meeting, investors will be particularly interested in the speech of its president, Christine Lagarde, scheduled half an hour after the press release from the Frankfurt institute, in order to determine whether the rate peak is now close. or even far away.

The Fed for its part left its key rates unchanged on Wednesday, a first since March 2022, but it opened the door to two more hikes of a quarter point each by the end of the year in the face of the solidity of the economy.

Its president, Jerome Powell, rejected the possibility of a reduction in the cost of credit in the year, as hoped for by the markets, at the risk of precipitating the economy into recession. U.S. retail sales figures, Empire State and Philly Fed indices, as well as U.S. industrial production data, due in the afternoon, will provide an afternoon overview of the evolution of the situation.

VALUES TO FOLLOW IN EUROPE:

H&M on Thursday reported unchanged local currency sales in the measured second quarter, slightly below consensus, due in part to cold weather that dampened demand.

AT WALL STREET

The New York Stock Exchange ended in scattered order on Wednesday after the Fed’s decisions, the Dow Jones index yielding 0.68% to 33,979.33 points, the broader S&P-500, grabbing 0.08% to 4,372, 59 points and the Nasdaq Composite taking 0.39% to 13,626.48 points.

The Federal Reserve’s Monetary Policy Committee (FOMC) responded to rate expectations after strong producer and consumer price data, leaving the fed funds target at 5.00%-5 on Wednesday, 25%, but its president blew the cold by declaring that the members of the FOMC were in favor of continued monetary tightening.

The trend then turned around on Wall Street after this announcement.

Regardless of the “Fed effect”, health insurer United Health fell 6.4% after saying it expected higher medical costs in the second quarter, weighing on the Dow Jones.

On the other hand, the manufacturers of electronic chips Nvidia (+4.8%) and Broadcom (+4.1%) were sought.

IN ASIA

At the Tokyo Stock Exchange, the Nikkei index ended down 0.05% at 33,485.49 points after four consecutive sessions of gains. The broader Topix fell 0.02% to 2,293.97 points.

The data of the day showed a surprise increase in Japanese exports in May (+0.6% year on year against -0.8% expected) for the 27th consecutive month, thanks in particular to solid sales in the automobile (+66 %).

The MSCI index comprising stocks from Asia and the Pacific (excluding Japan) rose by 0.2%.

In China, the Shanghai SSE Composite gained 0.49% and the CSI 300 gained 1.34%.

On the Chinese indicators of the day, industrial production (+3.5% over one year) and retail sales (+12.7% over one year) in May were below expectations, under the effect of weak domestic and foreign demands.

CHANGES

The prospect of an increase in the cost of credit in the United States supports the dollar which takes Thursday 0.33% against a basket of reference currencies, after a four-week low hit Wednesday at 102.66 points.

The euro is displayed at 1.0814 dollars, down 0.16%.

The yen fell to 141.05 to the dollar, the lowest since November 23.

The New Zealand dollar fell 0.33% to 0.61885 US dollars after the release of data showing that New Zealand fell into economic recession in the first quarter (contraction of 0.1% of GDP), which distances the prospect of further rate hikes in the country.

The Chinese yuan fell 0.16% to 7.1643 after touching 7.1916 per dollar, its lowest level since November, in reaction to the decision of the Chinese central bank (PCB) to lower its rate on Thursday. interest on medium-term loans, at 2.65% against 2.75% previously, in order to support the fragile rebound of the economy.

RATE

The yield on ten-year U.S. Treasuries takes about three basis points to 3.8389%. Its German equivalent of the same maturity rose by more than five basis points, 2.498%.

OIL

The oil market rebounded a little after the sharp drop the day before: Brent gained 0.52% to 73.58 dollars a barrel and American light crude (West Texas Intermediate, WTI) 0.53% to 68.63 dollars.

(Written by Claude Chendjou, edited by Bertrand Boucey and Kate Entringer)

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