by Laetitia Volga

PARIS (Reuters) – Wall Street is expected to rise slightly and European stock markets rose midway through the session on Wednesday, with the expected deceleration in inflation in the United States cautiously supporting equity markets while pushing the dollar down. Futures on New York indices signal an opening up 0.07% for the Dow Jones, 0.18% for the Standard & Poor’s-500 and 0.22% for the Nasdaq. In Paris, the CAC 40 gained 0.75% to 7,274.18 around 10:45 GMT. In Frankfurt, the Dax advances by 0.89% and in London, the FTSE by 1.08%.

The pan-European FTSEurofirst 300 index rose by 0.82%, the EuroStoxx 50 in the euro zone by 0.89% and the Stoxx 600 rose by 0.86%.

US consumer price data, to be released at 12:30 GMT, should confirm that US inflation continues to decline, which could provide an argument for supporters of an end to the rate hike cycle. Federal Reserve.

For the markets, it is almost confirmed that the Fed will raise its rates by a quarter of a point during the monetary policy meeting which will take place in two weeks. But some dare to hope that this will be the last increase in the cycle.

“Weaker consumer price numbers could be enough for the Fed to pause rather than continue to hike (rates) throughout the year,” said Stuart Cole, chief macroeconomist at Equiti. Capital.

WALL STREET VALUES TO FOLLOW

VALUES IN EUROPE

UK banks are in good shape after the Bank of England announced that the eight largest institutions had passed the stress tests. Barclays, HSBC and Lloyds gain 1.4% to 2.84% while Virgin Money takes 7.36%.

Thales wins 2.97%, the defense group having announced that it has started negotiations to buy Cobham Aerospace Communications for 1.1 billion dollars (997.19 million euros). Casino climbed 9.48% as Les Echos reported that billionaires looking to save the retailer are expected to raise their bids soon.

Zalando jumped 11.13% in the wake of its German competitor About You (+32.16%), which published a gross operating surplus well above expectations.

Red lantern of the Stoxx 600, Air France-KLM gives up 3.77% after the degradation of the recommendation of Deutsche Bank to “keep”.

RATE

Without waiting for US inflation figures, US Treasury bond yields fell to 3.9543% for ten-year securities, and to 4.8623% for two-year ones.

The ten-year German Bund yield fell two basis points to 2.626%.

CHANGES

Against a basket of benchmark currencies, the dollar fell to its lowest level in two months (-0.25%).

A number of indicators point to a marked drop in inflation in the United States, including used car prices, leading some observers to expect inflation to grow by 0.2% under underlying, against +0.4% in May. The Reuters consensus gives an increase of 0.3%.

“People are looking for 0.2% and if the rate is 0.3%, the dollar will strengthen slightly. If we stay at +0.4%, it means that all the models are wrong (…) because all the other charts we have suggest that inflationary pressures in the United States are slowing down quite sharply,” said Jordan Rochester, strategist at Nomura.

At the same time, the euro rose 0.11% to $1.1018.

OIL

Between the planned production cuts in Russia and Saudi Arabia and concerns about the global economic slowdown, the oil market does not know how to decide. Illustrating this hesitation, futures on Brent nibble 0.03% to 79.42 dollars a barrel and those on US light crude (West Texas Intermediate, WTI) 0.13% to 74.93 dollars.

(Laetitia Volga, editing by Kate Entringer)

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