PARIS (Reuters) – Major European stock markets are expected to rise on Wednesday as strong U.S. bank earnings and reassuring comments from the European Central Bank on key rates encouraged investors, despite the release of inflation data. in the euro zone which could surprise on the upside.
The first indications available give the Parisian CAC 40 up 0.42% at the opening, the EuroStoxx 50 gaining 0.64%. The FTSE in London is up 0.64% while the Dax in Frankfurt is up 0.3%.
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.
The release of final Eurozone inflation data at 09:00 GMT will give further indication of the future path of rates in Europe, with consensus expecting inflation to rebound month-on-month in June. compared to preliminary data.
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 ASIA
In Tokyo, Japanese indices ended higher, supported by the rally in US equities and dovish comments from the Governor of the Bank of Japan. The Nikkei gained 1.24% to 32,896.03 points, a two-week high, while the Topix rose 1.13% to 2,277.67 points. Poor economic indicators continue to weigh on Chinese markets , which are awaiting new measures to support activity. The Shanghai SSE Composite stagnated, the CSI 300 lost 0.08% and the Hong Kong Hang Seng index fell 0.58%.
The MSCI Asia-Pacific index excluding Japan fell 0.30%.
CHANGES
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 0.13% against a basket of benchmark currencies, while the euro fell 0.11% to 1.1214 dollars and the pound sterling dropped 0.73% to 1.2939 dollars.
The yuan hit a one-week low of 7.2122 yuan to the dollar (-0.42%), under pressure from strong demand for dollars from Chinese companies. The Australian dollar fell 0.38% to $0.6784.
RATE
Fixed income markets continued the rally that began yesterday with the release of activity data, which convinced investors that the Federal Reserve was nearing the end of its rate hikes.
The yield on ten-year Treasuries fell 4.5 basis points to 3.7444%, while the two-year rate fell 3 basis points to 4.715%.
In Europe, yields continued to fall, with German ten-year yields losing 4.4 basis points to 2.304%, while two-year yields fell 5.9 basis points to 3.118%. markets digesting the latest US economic data despite China’s pledged support for its economy, dwindling Russian supply and falling US inventories.
Brent fell 0.02% to 79.61 dollars a barrel and US light crude (West Texas Intermediate, WTI) fell 0.15% to 75.6 dollars.
(edited by Bertrand Boucey and Kate Entringer)
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