by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected to see slight variations on Wednesday while the American Federal Reserve must make its monetary policy decisions in the evening.

According to the first available indications, the Parisian CAC 40, which recorded a historic record of more than 7,582 points on Tuesday, should lose 0.08% at the opening on Wednesday. The Dax in Frankfurt, which also reached an unprecedented high at 16,837 points during the session the day before, could fall by 0.01%. The FTSE 100 in London, on the other hand, is expected to advance by 0.04%. The EuroStoxx 50 index is expected to increase by 0.02%.

The Fed will publish a monetary policy statement at 7:00 p.m. GMT at the end of two days of the FOMC, which will be followed half an hour later by a press conference by its president, Jerome Powell.

Investors will be particularly attentive to the tone used by the latter in order to detect signs on the evolution of the situation and the long-term trajectory of interest rates while a new status quo on borrowing costs for this meeting is hardly the subject of doubt.

The European Central Bank (ECB), the Bank of England (BoE), the Swiss National Bank (SNB) and the Bank of Norway (Norges Bank) must for their part make their respective monetary decisions on Thursday.

In terms of economic indicators, after the consumer price figures (CPI) in the United States, published on Tuesday, which do not argue for a rapid reduction in Fed rates at the start of next year, attention will be focused this Wednesday on producer prices (PPI). The Reuters consensus forecasts a rebound of 0.1% over one month but a deceleration to 1.0% over one year.

A WALL STREET

The New York Stock Exchange ended higher on Tuesday, reaching a peak in 2023, after inflation data did not shake up expectations regarding the potential timing of a Fed rate cut.

The Dow Jones index gained 0.48%, or 173.01 points, to 36,577.94 points.

The broader S&P-500 gained 21.26 points, or 0.46%, to 4,643.70 points.

The Nasdaq Composite advanced 100.91 points (+0.70%) to 14,533.40 points.

With their rise today, the main Wall Street indices have climbed to records since the first quarter of 2022.

According to the report released today by the US Department of Labor, the Consumer Price Index (CPI) recorded growth of 3.1% at an annual rate in November, in line with analysts’ expectations, in a context of falling fuel prices but rising rents in the United States.

On a monthly basis, consumer prices increased by 0.1%, while analysts expected them to remain stable.

If the markets recently started betting on a Fed rate cut next March, traders have revised their forecasts and are now targeting a first cut in May.

Among the major S&P-500 sectors, energy declined 1.35% as oil prices fell, marking the biggest decline of the session. Technologies, on the other hand, reached an unprecedented peak after recording a fourth consecutive increase.

On the value side, note the 0.58% decline in Alphabet the day after Google’s defeat in the antitrust lawsuit brought against it by Epic Games, developer of the video game “Fortnite”.

Oracle plunged 12.44% after reporting lower-than-expected quarterly forecasts, citing slowing demand for its cloud computing services.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index advanced 0.25% to 32,926.35 points, supported by values ​​linked to semiconductors such as Advantest (+5.59%), Renesas Electronics (+3.75% ) and Tokyo Electron (+4.71%).

The broader Topix gained 0.07% to 2,354.92 points at the close.

The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) loses 0.20%

In China, the Shanghai SSE Composite fell by 0.95% and the CSI 300 lost 1.48%.

VALUES TO FOLLOW IN EUROPE:

EXCHANGES/RATES

The dollar rose slightly (+0.16%) against a basket of reference currencies pending the conclusions of the Fed meeting.

The euro dropped 0.1%, to 1.0781 dollars, while the pound sterling stood at 1.255 dollars (-0.09%).

On the bond market, the yield on ten-year US Treasury bonds is almost unchanged, at 4.2063%, after a decline the day before during the session to 4.15% following the publication of consumer prices.

OIL

The oil market is falling further amid fears of excess supply and concerns about demand after losing more than 3% on Tuesday, to a six-month low.

Brent fell by 0.34% to $72.99 per barrel and American light crude (West Texas Intermediate, WTI) by 0.32% to $68.39.

(Written by Claude Chendjou, edited by Nicolas Delame)

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