PARIS (Reuters) – The main European stock markets are expected to rise on Tuesday at the opening, after accommodating comments from officials of the Federal Reserve, but in a context of strong uncertainty, between conflict in the Middle East and publication of indicators keys.

Futures contracts suggest an opening up 0.88% for the Parisian CAC 40, 0.72% for the FTSE in London, 0.68% for the Dax in Frankfurt, and 0.85% for the ‘EuroStoxx 50.

Dallas Fed President Lorie Logan said Monday that rising Treasury yields and tighter financial conditions could be enough to do some or all of the central bank’s job, so it wouldn’t have to raise its benchmarks further. rate.

Fed Vice Chairman Philip Jefferson insisted the central bank must proceed cautiously, as it risks doing too much while yields are high.

The statements of the two officials show that the Fed is concerned about the rise in yields and is starting to question the terminal level of its rates.

Inflation in the United States and the minutes of the last central bank meeting expected this week could nevertheless revive fears of stronger tightening.

“Caught between encouraging economic prospects and rising real rates, equity markets are resisting and clinging to growth prospects, which justify their current levels,” write Natixis strategists.

“However, if US inflation were to surprise on the rise, the Fed (which relies on high rates to transmit its monetary policy) would find itself in the worst possible position.”

The opening of the results season in the United States at the end of the week calls for caution as investors look for catalysts for risky assets.

Furthermore, the conflict between Israel and the Palestinian organization Hamas is entering its fourth day and threatens to expand in the region, pushing investors towards safe haven assets.

VALUES TO FOLLOW:

RATE

Yields on US securities are falling sharply in a context of risk aversion and after two Fed officials indicated that high yields could push the central bank not to raise its rates again.

The ten-year Treasury yield fell 12.5 bps to 4.6571%, while the two-year rate fell 10.1 bps to 4.978%.

The German ten-year yield eroded by 1 bp to 2.774%, while that of the two-year rate fell by 1.8 bp to 3.049%.

A WALL STREET

The New York Stock Exchange ended up on Monday, supported in particular by the energy sector which is benefiting from the repercussions of the rise in oil prices caused by the new conflict in Israel and the Gaza Strip.

The Dow Jones index gained 0.59%, or 197.07 points, to 33,604.65 points. The broader Standard & Poor’s 500 gained 27.16 points, or 0.63% to 4,335.66 points. The Nasdaq Composite advanced 52.90 points (0.39%) to 13,484.239.

IN ASIA

Japanese markets advanced, in the wake of the rise in Wall Street and energy. The Nikkei index gained 2.43% to 31,746.53 points and the broader Topix gained 2.13% to 2,312.40 points.

Stocks linked to oil exploration and refiners gained 8.52% and 5.06% respectively, while the aviation sector was one of only two sectors in decline, dropping 1.56%.

The Chinese are falling, investors offloading securities exposed to the Middle East. The Shanghai SSE Composite fell by 0.64%, the CSI 300 by 0.62%. The Hong Kong Hang Seng index gained 1.1%, supported by statements from Fed officials.

CHANGES

The foreign exchange markets are stable, with the dollar hesitating between bond easing and the status of a safe haven asset.

The dollar is stable against a basket of reference currencies, while the euro remains at $1.0557, and the pound sterling erodes by 0.14% to $1.2219.

In Asia, the yen fell 0.17% to 148.75 yen per dollar, while the Australian dollar was flat at 0.6401 dollars.

OIL

Oil is eroding after jumping more than 4% on Monday, with markets worried about possible supply tensions.

Brent declined by 0.62% to $87.6 per barrel, American light crude (West Texas Intermediate, WTI) by 0.64% to $85.83.

(Written by Corentin Chapron, edited by Zhifan Liu and Kate Entringer)

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