PARIS (Reuters) – The main European stock markets are expected to fall on Thursday at the opening, the “minutes” of the American Federal Reserve published the day before confirming that American monetary policy should be more restrictive in the coming months.
The first indications available indicate that the CAC 40 in Paris should yield 0.56% and the FTSE in London will fall by 0.42%. The Dax in Frankfurt would fall by 0.44% and the EuroStoxx 50 by 0.48%, according to the “futures” on indices.
The Fed “minutes” showed that almost all central bank officials expect further rate hikes after the June break.
According to the Fedwatch tool, the money markets believe that a rate hike is 85% likely during the next Fed meeting on July 26 and a second rate hike is 50% likely by November.
The escalating Sino-U.S. trade war is also expected to weigh on European markets at the open, with Beijing warning on Wednesday that export restrictions on certain metals needed to make semiconductors were just one “beginning”.
Two indicators on American employment will be published at the beginning of the afternoon, followed by the publication of the ISM for services in the United States, three elements which will make it possible to gauge the persistence of inflationary pressures in the rest of the economy.
VALUES TO FOLLOW:
AT WALL STREET
Wall Street ended in the red yesterday with the confirmation of the US central bank’s “hawkish” posture.
The Dow Jones index fell 0.38% to 34,288.64 points, the S&P-500 lost 0.20% to 4,446.82 points, and the Nasdaq Composite fell 0.18% to 13.791, 65 dots.
Meta Platforms rose 2.9% ahead of Thursday’s expected launch of its Threads app to compete with Twitter.
IN ASIA
In Tokyo, the Nikkei continues to decline from its 33-year high, and fell 2.0% to 32,667.3 points, while the Topix lost 1.16%, to 2,279.3 points. Profit taking continued on Japanese indices, particularly on semiconductor related stocks responsible for the rally in Japanese stocks so far.
Sino-US tensions weigh on Chinese stocks. The Shanghai SSE Composite lost 0.57% and the CSI 300 lost 0.71%.
CHANGES
The dollar is treading water (+0.02%) against a basket of benchmark currencies, despite the rather “hawkish” “minutes” from the Fed.
The euro is displayed at 1.0843 dollars (-0.06%) and the pound sterling at 1.2702 dollars (-0.02%).
The Japanese currency is trading at 143.88 yen to the dollar, up 0.50%, supported by position adjustments and strong currency sales by Japanese exporters.
RATE
Like the greenback, US bond markets were not surprised by the Fed’s report.
The yield on ten-year US Treasury bonds fell from its four-month high, reached during the session, and stood still at 3.9535%. OIL
The oil market fell slightly, worried about the implications of the Fed’s monetary policy on demand.
Brent lost 0.34% to 76.39 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.11% to 71.71 dollars.
(Corentin Chapron, edited by Laetitia Volga)
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