by Laetitia Volga

PARIS (Reuters) – Wall Street is expected to open close to balance on Tuesday while European stocks are in disarray in the middle of a day’s session dominated by a boost from China, awaiting further indications on the evolution of inflation in the United States.

Futures on New York indices signal a stable opening (+0.04%) for the Dow Jones, up 0.15% for the Standard & Poor’s-500 and 0.18% for the Nasdaq.

In Paris, the CAC 40 gained 0.96% to 7,212.42 around 11:20 GMT. In Frankfurt, the Dax took 0.46% and while the London FTSE dropped 0.17%, the strength of the pound sterling penalizing export-oriented stocks.

The pan-European FTSEurofirst 300 index advanced by 0.42%, the EuroStoxx 50 of the euro zone by 0.63% and the Stoxx 600 by 0.53%.

In Asia, the Hong Kong Stock Exchange gained nearly 1% thanks in particular to Beijing’s extension of its support for the real estate sector until the end of 2024, which fuels hopes of a new cycle of easing.

This announcement benefits European companies exposed to the Chinese market, primarily those in the luxury industry.

Market sentiment is also benefiting from comments from several Federal Reserve officials – including Mary Daly and Michael Barr – who signaled on Monday that the end of the US central bank’s rate hike was approaching. A quarter-point increase in the fed funds target on July 26 is widely anticipated, but it remains unclear what will be decided in September.

The publication of inflation figures in the United States on Wednesday could make it possible to see more clearly the impact of the monetary tightening carried out by the Fed so far. Economists polled by Reuters expect the consumer price index to have risen 3.1% in June, after +4% in May, and core inflation by 5%, after +5 .3%.

VALUES IN EUROPE

In values, Kering, LVMH and Hermès gained from 1.42% to 2.36% in Paris. Richemont gains 1.84% in Zurich.

Daimler Truck was up 1.47% after raising its profit and revenue guidance on improved supply chain.

At the top of the Stoxx 600, Kingspan jumped 12.31%, the Irish construction group having said it anticipates a record profit in the first half.

CHANGES

The prospect of an imminent end to the current cycle of rate hikes in the United States does not suit the dollar, which lost 0.2% against a basket of international currencies. Against the Swiss franc, the greenback hit its lowest level since January 2021.

The pound hit a 15-month high against the dollar as UK wage growth in May beat expectations, which could increase pressure on the Bank of England to continue raising its rate director.

“The wage data indicates that there is still work to do for the BoE and that inflationary pressures are still there,” said Jane Foley, head of strategy at Rabobank.

RATE

On the bond market, the yield on ten-year Treasuries dropped more than three basis points to 3.968% and the German ten-year yielded two points, around 2.616%.

OIL

Brent crude rose slightly to $78.04 a barrel and US light crude to $73.38 with August production cuts expected in Russia and Saudi Arabia.

(Laetitia Volga, editing by Kate Entringer)

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