by Diana Mandia
(Reuters) – Wall Street is expected to rise on Thursday and European stock markets are progressing mid-session against a backdrop of strong appetite for risk after the tone considered accommodating by the American Federal Reserve (Fed) on Wednesday, and before the Bank’s meetings of England (BoE) and the European Central Bank (ECB) later today.
Futures on New York indices signal an opening on Wall Street up 0.23% for the Dow Jones, which reached a record in almost two years on Wednesday, 0.28% for the Standard & Poor’s-500 and by 0.42% for the Nasdaq.
In Paris, the CAC 40 gained 1.31% to 7,630.07 around 11:10 GMT. In Frankfurt, the Dax increased by 0.87% and in London, the FTSE gained 2.26%.
The pan-European FTSEurofirst 300 index is up 1.49%, the euro zone’s EuroStoxx 50 is up 1.13% and the Stoxx 600, which is touching a near two-year high, is up 1.67%.
The moment is euphoric on the financial markets after the American Federal Reserve (Fed) on Wednesday maintained its key rate at its current level, as expected, and signaled that its cycle of monetary tightening was coming to an end, with costs borrowing likely to fall next year.
In Europe, investors are bracing for a new round of monetary policy decisions on Thursday, including from the BoE and ECB at 12:00 GMT and 1:15 GMT respectively. The two central banks are also expected to maintain their rates at their current levels.
The ECB is also expected to downgrade its growth and inflation forecasts while trying to dampen speculation about imminent rate cuts, as markets now price Frankfurt’s rate cuts in 2024 at around 155 basis points. , compared to 135 basis points on Wednesday.
“The big question today is to what extent central banks are hunting in packs,” said Michael Metcalfe, an analyst at State Street Global Markets.
As a preview, the Swiss National Bank (SNB) once again left its main key rate unchanged on Thursday, as expected, while Norges Bank, the Norwegian central bank, opted for a surprise rate increase of 25 basis points.
VALUES TO FOLLOW AT WALL STREET
The New York Stock Exchange is expected to be back in the green at the opening on Thursday after a sharp rise the day before in reaction to the Fed’s decision.
In terms of values, Adobe, famous for Photoshop software, lost 5.4% in pre-market trading as it forecast annual and quarterly revenues lower than consensus due to increased regulatory pressure on its subscription models.
VALUES IN EUROPE
European real estate soared by 5.7% on Thursday, the best performance of the Stoxx 600 sectors, supported by the Fed’s announcements.
The German group Vonovia and the Swedish SBB take 8.3% and 15.6% and in Paris, Icade advances by 5.6%, Nexity by 7% and Unibail Rodamco gains 5.3%.
In the rest of the sectors, Vivendi advances by more than 7% after announcing that it is considering a split of its activities into three listed entities, while Air France-KLM climbs by 8.3%, the airline having revised its operating margin outlook for the period 2026-2028.
In Milan, the luxury group Brunello Cucinelli grew by 5.1% after revising upwards its turnover growth forecasts for 2023.
RATES Bond yields in the euro zone fall on Thursday after the Fed and pending the ECB.
The German ten-year yield lost almost 10 basis points (bp) to 2.07%, and that of the two-year rate lost more than 16 bps to 2.49%.
The yield on the Italian 10-year bond stood at 3.79%, down 14 bps.
American rates are also falling: the ten-year rate loses more than 8 basis points to 3.9488%, slipping below 4% for the first time since August, and the two-year rate drops around 15 bps to 4.3277%. .
CHANGES
The dollar declines against the majority of currencies after the Fed’s accommodating meeting. The greenback fell 0.37% against a basket of reference currencies, while the euro gained 0.39% to 1.0915 dollars.
In Asia, the message from the Federal Reserve boosts the yen, which strengthens by 1.01% to 141.43 yen per dollar.
OIL
Oil prices are supported by the Fed’s decision, which weakened the dollar, and by a larger than expected drop in oil stocks in the United States.
Brent rose 1.98% to $75.73 per barrel and American light crude (West Texas Intermediate, WTI) rose 1.97% to $70.84.
(Written by Diana Mandiá, edited by Blandine Hénault)
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