The main European stock markets are expected to rise cautiously on Thursday before the publication during the day of data on consumer prices in the United States and the start of the corporate results season on Friday, with investors counting on the end of the rise in interest rates of the major central banks.
According to the first available indications, the Parisian CAC 40 should gain 0.30% at the opening, the Dax in Frankfurt 0.45% and the FTSE 100 in London 0.44%. The EuroStoxx 50 index is expected to increase by 0.40%.
Main economic indicator of the week, the monthly consumer price index in the United States will be published at 12:30 GMT and the market anticipates a deceleration to 0.3% in September after 0.6% in August, while on a year, it could have fallen to 3.6% after 3.7% the previous month.
However, a surprise cannot be ruled out as the producer price statistics (PPI) showed the day before, which came out in September clearly above expectations (+0.5% over one month and +2.7 % over one year), even if it shows a slowdown compared to August.
Traders still expect a pause on US Federal Reserve (Fed) rates at the November and December meetings as the minutes of its latest meeting, released on Wednesday, suggest that too tight a tightening could pose a risk according to some analysts.
In Europe, Christine Lagarde and François Villeroy de Galhau, members of the European Central Bank (ECB), as well as Huw Pill, chief economist of the Bank of England (BoE), are due to speak during the day, on the occasion distinct events.
The day before, the governor of the Dutch central bank, Klaas Knot, estimated that the ECB had made “significant progress” in bringing inflation back towards the 2% target but that there was still a long way to go and that a further increase in rates cannot be ruled out. The ECB will make its next monetary policy decision on October 26.
In terms of corporate results, major American financial groups such as JPMorgan Chase, Wells Fargo, Blackrock and Citigroup will publish the first results of the third quarter on Friday.
A WALL STREET
The New York Stock Exchange ended up on Wednesday, at the end of a seesaw session, while the report of the last meeting of the Fed, according to which the officials of the American central bank favored the prudence, fueled the hypothesis of a pause in the cycle of rate increases.
The Dow Jones index rose 0.19%, or 65.57 points, to 33,804.87 points.
The broader S&P-500 gained 18.71 points, or 0.43%, to 4,376.95 points.
The Nasdaq Composite advanced 96.83 points (+0.71%) to 13,659.68 points.
The volatility of the data and the revision of previous statistics have contributed to complicating the analysis of the economy, favoring the option of caution to “determine the extent of monetary tightening which could be appropriate”, it is written in the “minutes” of the Fed meeting on September 19-20, communicated in the afternoon.
This report fueled the day’s volatility on Wall Street, whose main indices recorded gains at the start of the session, before falling back ahead of the publication of the Fed’s report. They finally returned to the green.
Among the main sectors of the S&P-500, real estate and utilities, so-called defensive sectors, were the best performers, up 2% and 1.6%, respectively.
Energy fell by 1.4%, weighed down by the 3.6% fall in ExxonMobil after the announcement of the takeover of Pioneer Natural Resources.
On the value side, the disappointing debut of Birkenstock Holding could have contributed to the mixed sentiment, as its stock plunged 12.6%.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index advanced 1.64% to 32,460.34 points, supported by cheap purchases, particularly in the semiconductor sector, leading the gains. The broader Topix rose 1.38% to 2,339.76 points as the close approached.
The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) gained 0.7%, to a three-week high.
In China, the Shanghai SSE Composite gained 0.83% and the CSI 300 increased by 0.97%, the indices being driven by the banks, a Chinese sovereign fund having increased its participation in the country’s four main banks.
VALUES TO FOLLOW IN EUROPE:
CHANGES
The dollar fell 0.05% on Thursday against a basket of reference currencies, close to a two-week low, after the Fed’s “minutes”, which underline the cautious position adopted by central bank officials .
The euro advances further, by 0.13%, to 1.0631 dollars, after reaching a high of more than two weeks on Wednesday.
RATE
The yield on ten-year US Treasury bonds fell further, dropping almost three basis points on Thursday, to 4.5707%, after a decline of 7.6 points on Wednesday, which sends it towards its biggest weekly decline in three months.
OIL
The oil market is in decline for the third session in a row, dragged down by the increase in crude stocks in the United States according to figures from the American Petroleum Institute, cited by sources. The market is also awaiting data from the EIA, the American energy information agency, at 3:00 p.m. GMT.
Brent fell by 0.26% to $85.60 per barrel and American light crude (West Texas Intermediate, WTI) by 0.4% to $83.16.
(Writing by Claude Chendjou, edited by Kate Entringer)
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