PARIS (Reuters) – Wall Street is expected to be hesitant at the opening on Tuesday, while European stock markets are up mid-session, investors welcoming the slowdown in inflation in the euro zone in November and the decision of the Bank of Japan, but the wait-and-see attitude persists ahead of other indicators this week.

New York index futures suggest a scattered Wall Street opening, with the Dow Jones, Standard & Poor’s 500 and Nasdaq showing no clear direction.

In Paris, the CAC 40 is stable at 7,567.7 points around 11:05 GMT, like the FTSE in London. The Dax in Frankfurt advances by 0.36%.

The pan-European FTSEurofirst 300 index takes 0.23%, compared to 0.22% for the EuroStoxx 50 and 0.28% for the Stoxx 600.

Final inflation in the euro zone, published on Tuesday, showed that price dynamics had slowed more than initially expected in November, good news for markets focused on the easing of monetary policies.

The European Central Bank (ECB) should lower its rates “at some point” in 2024, François Villeroy de Galhau, member of the ECB Governing Council, said on Tuesday, further encouraging investors.

The relief could be short-lived, as the publication of inflation in the United Kingdom on Wednesday, then PCE inflation in the United States on Friday, could revive investors’ nervousness.

On Tuesday, the Bank of Japan (BOJ) also kept rates at their current levels, as markets worried about a possible tightening of its ultra-accommodative monetary policy.

A tightening of Japanese monetary policy poses a risk to global bond markets because Japanese investors are large holders of foreign bond securities. A rise in domestic yields, triggered by a rise in BOJ rates, could cause massive repatriations in Japanese securities, and put pressure on the rest of bond assets.

VALUES TO FOLLOW IN WALL STREET

Google agreed to pay $700 million and allow greater competition on its online smartphone app store, the Play store, under an agreement reached to settle an antitrust dispute whose contents were revealed by a court on Monday Californian.

Apple said on Monday it would halt sales of its Series 9 and Ultra 2 digital watches in the United States starting this week as the company faces litigation over their patent.

VALUES TO FOLLOW IN EUROPE

Virbac climbs 10.86% after the animal health specialist raised its outlook for turnover and operating profit ratio thanks to a “significant rebound in sales observed in the third quarter and which is continues in the fourth quarter.

Casino stumbles by 9%, while the group is discussing with Les Mousquetaires and Auchan to sell its supermarkets and hypermarkets.

Sodexo (-0.53%) announced on Tuesday that the listing on the Paris Stock Exchange of its social benefits division Pluxee would take place on February 1, 2024.

Legrand fell 1.6% after UBS lowered its recommendation from “buy” to “sell”.

RATE

Yields fell after the BOJ’s monetary policy decision and after the publication of European inflation falling more sharply than initially expected in November.

The yield on the ten-year Treasury lost 4.9 bps to 3.907%, while the two-year fell by 2.4 bps to 4.4331%.

The yield on the German ten-year rate fell by 4.7 bp to 2.027%, that of the two-year rate lost 2.3 bp to 2.524%.

CHANGES

The pound strengthens against the dollar, as investors bet on a widening of the rate gap between the British and American economies next year.

The dollar is stable against a basket of reference currencies, the euro gains 0.12% to $1.0935, and the pound sterling gains 0.48% to $1.2703.

OIL

Crude is hesitating as markets assess the impact of the Red Sea attacks – while analysts at Goldman Sachs wrote in a report released Tuesday not to expect significant impacts.

Brent advanced 0.1% to $78.03 per barrel, American light crude (West Texas Intermediate, WTI) remained stable at $72.48.

NO MORE MAJOR ECONOMIC INDICATOR ON THE AGENDA FOR DECEMBER 19

(Written by Corentin Chappron, edited by Kate Entringer)

Copyright © 2023 Thomson Reuters