by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected to be in the green again on Monday in a context of optimism about the reduction in interest rates from the major central banks, just over a week before the Federal Reserve meetings (Fed), the European Central Bank (ECB) and the Bank of England (BoE).

Following on from last week’s gains, the Parisian CAC 40 should gain 0.06% at the opening, according to the first available indications. The Dax in Frankfurt could advance by 0.19%, while the FTSE 100 in London could fall by 0.11%. The EuroStoxx 50 index should gain 0.07%.

In the absence of any major indicator or almost for today’s session, wait-and-see behavior should dominate and lead to some volatility. Especially since Christine Lagarde, the president of the ECB, must speak from 2:00 p.m. GMT while Joachim Nagel, the president of the Bundesbank, estimated on Sunday that it was premature to declare victory over inflation.

Investors are awaiting the indices of services activity scheduled for Tuesday in Europe and the United States, while those in the manufacturing sector pleasantly surprised last week, with activity contracting less than expected in the euro zone. in November.

The other big meeting of the week concerns the official report on job creation, the unemployment rate and wages in the United States, which will be published on Friday, the last week before the December 12 and 13 meeting of the Fed. The ECB and the BoE will make their monetary policy decisions the day after the end of this meeting. Those of the Bank of Canada (Boc) and the RBA, Australia’s central bank, are scheduled for Tuesday.

A WALL STREET

The New York Stock Exchange ended up on Friday, supported by comments considered encouraging by Jerome Powell on the inflation front which pushed the S&P-500 to a closing level not seen since the start of the year.

The Dow Jones index gained 0.82%, or 294.61 points, to 36,245.50 points. The broader Standard & Poor’s 500 gained 26.83 points, or 0.59% to 4,594.63 points. The Nasdaq Composite advanced 78.81 points (+0.55%) to 14,305.032.

Over the week, the Dow Jones gained 2.4%, the S&P 500 advanced 0.77% and the Nasdaq gained 0.38%.

The risks that the US Federal Reserve will tighten interest rates too much and the risks that rates will not be high enough to bring inflation back to its target are currently “more balanced”, the Fed chairman said on Friday. Jerome Powell, in comments which also emphasize the caution that the central bank will have to show for its next decisions.

In terms of values, Tesla lost 0.5% as investors considered the prices of its Cybertruck electric pick-up too high, while Alibaba lost 1.19% after Morgan Stanley lowered its recommendation.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index ended down 0.69% at 33,201.33 points, while the broader Topix lost 0.83% to 2,362.65 points. Japan’s main index fell to a nearly three-week low amid a strengthening yen that is affecting exporting companies such as automakers.

The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) gained 0.30%, driven by the South Korean and Australian stock markets.

In China, the Shanghai SSE Composite fell by 0.08% and the CSI 300 lost 0.47%.

EXCHANGES/RATES

The dollar regained some of the ground lost on Friday following Jerome Powell’s speech, gaining 0.16% against a basket of reference currencies.

The euro fell by 0.08%, to 1.0872 dollars, while the pound sterling stood at 1.2682 dollars (-0.14%).

In cryptocurrencies, bitcoin touched the symbolic mark of $40,000 for the first time in almost a year, with traders anticipating the imminent approval of bitcoin funds traded on the US stock market.

In bonds, the yield on ten-year US Treasury bonds rose by approximately one basis point, to 4.2357%, after a decline of 13 points on Friday following Jerome Powell’s speech.

Markets now expect a 70% probability of a Fed rate cut in March compared to a probability of around 43% on Thursday, according to CME Group’s FedWatch barometer.

OIL

The oil market, which fell by more than 2% on Friday due to investor skepticism about OPEC+ policy, is once again in the red.

Brent fell by 0.81% to $78.24 per barrel and American light crude (West Texas Intermediate, WTI) by 0.73% to $73.53.

GOLD

Gold hit an all-time high of $2,111.39 at the start of a week full of economic data that will test markets’ bets on rapid interest rate cuts. Around 06:30 GMT, it stood at $2,085.99 per ounce (+0.73%).

(Written by Claude Chendjou, edited by Zhifan Liu)

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