PARIS (Reuters) – The main European stock markets are expected to be mixed on Wednesday at the opening, divided between solid results from American banks, reassuring comments from the European Central Bank on key rates and caution before the publication of inflation data. in the euro zone. The first indications available give the Parisian CAC 40 an increase at the opening, like the EuroStoxx 50, up 0.18%. The FTSE in London would be stable while the Dax in Frankfurt would fall by 0.11%.
Stronger-than-expected quarterly results from Bank of America and Morgan Stanley supported stocks on both sides of the Atlantic on Tuesday and provided reassurance about the health of the U.S. economy, with investors judging the prospect of a soft landing from more and more likely.
On Tuesday, Klaas Knot, a member of the ECB’s governing council, also explained that further rate hikes after the one scheduled for July were “by no means a certainty” in the euro zone, a comment that supported the markets. Europeans. However, the publication of final data on inflation in the euro zone at 09:00 GMT encourages investors to be cautious, the consensus expecting in particular a rebound in inflation month on month in June compared to the data. preliminaries.
AT WALL STREET
Wall Street ended in the green on Tuesday, supported in particular by the good results of American banks. The Dow Jones index rose 1.06% to 34,951.93 points, the highest since April 2022, the S&P 500 gained 0.71% to 4,554.98 points, while the Nasdaq Composite advanced 0, 76% at 14,353.64 points.
In Tokyo, Japanese indices are advancing, supported by the rally in US equities and dovish comments from the Governor of the Bank of Japan. The Nikkei took around 1% to 32,810.30 points, to a two-week high, while the Topix rose 0.71% to 2,268.32 points.
The poor economic indicators continue to weigh on the Chinese markets, which are awaiting new measures to support activity. The Shanghai SSE Composite lost 0.26%, the CSI 300 lost 0.45% and the Hong Kong Hang Seng index fell 1.16%. The MSCI Asia-Pacific index excluding Japan fell 0.30%.
The dollar is supported by expectations of a halt to Fed rate hikes while the euro retreats following dovish comments from Klaas Knot.
The greenback advanced 0.12% against a basket of benchmark currencies, while the euro fell 0.04% to 1.1221 dollars and the pound sterling dropped 0.14% to 1.3016 dollars.
The yuan hit a one-week low of 7.209 yuan to the dollar (-0.42%), under pressure from strong demand for dollars from Chinese companies. The Australian dollar fell 0.38% to $0.6788.
US rates markets remain stable after their decline on Tuesday, linked to weaker than expected economic data.
The yield on ten-year Treasuries fell 1.7 basis points to 3.7717%, while the two-year rate remained at 4.749%. OIL
Crude fell slightly as markets digested the latest US economic data despite China’s pledged support for its economy, dwindling Russian supply and falling US inventories.
Brent fell 0.28% to 79.41 dollars a barrel, US light crude (West Texas Intermediate, WTI) yielding 0.41% to 75.44 dollars.
(edited by Bertrand Boucey)
Copyright © 2023 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.