by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected to be on a cautious note on Wednesday, with geopolitical risk likely to still be at the forefront despite the publication of numerous economic results and indicators, including inflation figures in the euro zone and in the United Kingdom, while major central banks are due to meet from next week.

According to the first available indications, the Parisian CAC 40 should lose 0.08% at the opening. The Dax in Frankfurt could gain 0.12% and the FTSE 100 in London nibble 0.05%. The EuroStoxx 50 index is expected to fall by 0.14%.

As in previous sessions, investors should keep an eye on developments in the Middle East where anger is brewing after a strike against a hospital in Gaza, while American President Joe Biden is visiting Israel this Wednesday in order to avoid a conflagration in the region.

In the meantime, oil prices continue to surge, rising more than 2% to two-week highs.

After the publications considered positive by the major American banks, Netflix and Tesla must set the tone in technology and growth stocks after the close on Wall Street. In Europe, ASML, SAP and Deutsche Börse publish their quarterly accounts.

In the evening, the market will take note at 6:00 p.m. GMT of the Beige Book of the American Federal Reserve (Fed), which serves as a working basis for its monetary policy committee, whose meeting is scheduled for October 31 and November 1.

In the euro zone and the United Kingdom, where the respective central banks are due to meet on October 26 and November 2, the consumer price figures, scheduled for this Wednesday at 06:00 GMT and 09:00 GMT, will be worth watching.

In China, gross domestic product (GDP) grew more strongly than expected in the third quarter, at 4.9% at an annual rate, suggesting that its recent rebound could enable it to achieve the annual growth target set by Beijing. The retail sales statistics for the month of September showed an increase of 5.5%, against a consensus of +4.9%, after an increase of 4.6% in August.

Analysts, however, remain cautious about the Chinese economy, given the persistent difficulties in the key real estate sector, notes Harry Murphy Cruise, economist at Moody’s Analytics, who judges China’s economic recovery “still in its infancy.”

A WALL STREET

The New York Stock Exchange ended almost stable on Tuesday with the exception of the Nasdaq, weighed down by the rise in yields and the fall in semiconductor sector stocks, the American government having said it was considering stopping deliveries to China of processors. intended for artificial intelligence.

The Dow Jones index gained 0.04%, or 13.11 points, to 33,997.65 points.

The S&P 500 lost 0.43 points or 0.01% to 4,373.2.

The Nasdaq Composite dropped 34.24 points (-0.25%) to 13,533.75 points.

The Philadelphia SE semiconductor index fell 0.8% as did Nvidia stock, although the semiconductor maker said it did not expect the government’s measures to have a significant impact on its financial results. .

Yields on US Treasury bonds rose on the back of statistics showing the robustness of the US economy and weighed on rate-sensitive technology stocks.

Retail sales grew more than expected in September and industrial production rose last month, contrary to expectations.

Several well-received corporate results, including those from Bank of America, limited the decline in the indices.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index fell 0.13% to 31,999.06 points, while the broader Topix lost 0.03% to 2,291.48 points as the close approached.

Indices in Asia are penalized by fears of continued monetary tightening by the Fed given the robustness of the American economy, while the conflict in Gaza weighs on investor sentiment.

In China, the Shanghai SSE Composite fell by 0.72% and the CSI 300 lost 0.71%.

VALUES TO FOLLOW IN EUROPE:

EXCHANGES/RATES

The dollar, which is at high levels, is practically stable on Wednesday (-0.05%) against a basket of reference currencies after having gained 7% since mid-July.

The euro advanced 0.01%, to 1.0576 dollars, while the pound sterling stood at 1.2183 dollars (+0.04%).

On the bond market, the yield on ten-year US Treasury bonds fell by around two basis points, to 4.8343%, after having increased by around 100 points since mid-July. The two-year is down 2.6 points, at 5.1926%, after an increase of 14 points on Tuesday, which brought it closer to a 16-year peak, at 5.24%.

OIL

The oil market is rising sharply due to fears of an escalation of the conflict between Israel and Hamas, which could weigh on supplies.

“The cancellation of a summit between Joe Biden and Arab leaders reduces the likelihood of a diplomatic solution to the Israeli conflict with Hamas,” underlines Vivek Dhar, analyst at the Commonwealth Bank of Australia.

“A prolonged occupation looms as a scenario that would push Brent oil futures above $100 a barrel, as it increases the risk that the conflict will expand and potentially directly involve Iran,” he said. he added.

Brent jumped 1.94% to $91.64 per barrel and American light crude (West Texas Intermediate, WTI) jumped 2.24% to $88.60.

(Writing by Claude Chendjou, edited by Kate Entringer)

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