by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected to see slight variations at the opening on Tuesday after contrasting statements from central bankers and before the publication of inflation figures in the euro zone.

According to the first available indications, the Parisian CAC 40 should gain 0.12% at the opening, the Dax in Frankfurt 0.16% and the FTSE 100 in London 0.01%. The EuroStoxx 50 index is expected to increase by 0.13%.

Equity markets in Europe, which remain on five weeks of increases in a row, should consolidate their recent gains, especially as three members of the Governing Council of the European Central Bank (ECB), including Bostjan Vasle, considered Monday premature to talk about a rate cut. The latter also believes that the current strong easing in the bond market could be counterproductive, leading to a prolonged cycle of high rates to bring inflation down to 2%.

The evolution of consumer prices in November in the euro zone will be known at 10:00 GMT and the Reuters consensus expects a stable increase of 2.4% over one year.

An upward surprise could call into question the markets’ scenario of an ECB rate cut of 150 basis points in 2024.

The Bank of Japan (BoJ), the last of the major central banks to pursue an accommodating policy, for its part chose the status quo on Tuesday, saying it wanted to wait for more clues to know if wages will increase enough to sustainably maintain inflation around of its 2% objective.

None of the analysts polled by Reuters expected a policy change in Japan but 17 of 28 economists thought the bank’s negative rates would likely be removed in April.

A WALL STREET

The New York Stock Exchange ended higher on Monday, in a context of persistent optimism on the trajectory of Fed rates pending the publication of a new series of indicators this week.

The Dow Jones index finished virtually unchanged, gaining 0.86 points (+0.002%), to 37,306.02 points.

The broader S&P-500 gained 21.37 points, or 0.45%, to 4,740.56 points.

The Nasdaq Composite advanced 90.89 points (0.61%) to 14,904.81 points.

Markets remain supported by the Fed’s latest monetary policy decision, with the central bank indicating that its key rate has reached, or is close to, its peak.

The data to be published this week could help investors refine their bets on the date when the first rate cut will take place: swap markets are currently betting on two cuts of 25 basis points by June 2024.

In terms of values, Adobe gained 2.47% after the group and Figma decided to abandon their $20 billion merger project announced in September last year.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index ended with a gain of 1.41% to 33,219.39 points, in a context of weakening of the yen and rise in technology stocks. The broader Topix gained 0.73% to 2,333.81 points.

The MSCI index of Asian and Pacific stocks (excluding Japan) is just below its four-month high.

In China, the Shanghai SSE Composite fell by 0.21% and the CSI 300 lost 0.16%.

VALUES TO FOLLOW IN EUROPE:

EXCHANGES/RATES

The dollar is stable (+0.06%) against a basket of reference currencies following a slight decline.

The euro advanced 0.03%, to $1.0922, while the pound sterling stood at $1.2653 (+0.09%).

The yen fell to 143.78 per dollar and 156.88 per euro, losing more than 0.6%, after the Bank of Japan’s monetary policy decision.

On the bond market, the yield on ten-year US Treasury bonds fell by around one basis point, to 3.9406%, after an increase of three points the day before.

OIL

Oil remains rising as attacks by Yemeni Houthi rebels on ships in the Red Sea spark concerns over supplies.

Brent advanced 0.12% to $78.04 per barrel and American light crude (West Texas Intermediate, WTI) rose 0.04% to $72.50.

(Writing by Claude Chendjou, edited by Kate Entringer)

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