(Reuters) – The main European stock markets are expected to decline at the opening on Wednesday, with markets remaining cautious on the eve of the publication of inflation data in the United States.
According to the first available indications, the Parisian CAC 40 would be down 0.17% at the opening. Futures contracts suggest a decline at the opening of 0.22% for the FTSE in London, 0.21% for the Dax in Frankfurt and 0.24% for the EuroStoxx 50.
The CPI inflation index will be published on Thursday in the United States and is the main indicator expected this week.
The scenario favored by the markets, that of a rapid drop in interest rates from the Federal Reserve, was called into question at the start of the year, notably after the publication of a monthly report on American employment more solid than expected.
Investors estimate the probability that the Fed will cut rates at its next meeting in March is just under 70%. However, a surprise on inflation could push the central bank to remain cautious and postpone its first rate cut.
Furthermore, the start of the results season in the United States will be given on Friday with several large American banks.
Industrial production in France is expected this Wednesday at 07:45 GMT, in a schedule that is also poor in publications and data.
A WALL STREET
The New York Stock Exchange ended mixed on Tuesday, with only the Nasdaq finishing slightly in the green, alongside a modest rise in bond yields ahead of inflation data this week, as investors question the timing and magnitude of the Fed’s monetary policy shift this year.
The Dow Jones index fell 0.42%, or 157.85 points, to 37,525.16 points. The broader S&P-500 lost 7.04 points, or 0.15%, to 4,756.50 points. The Nasdaq Composite advanced 13.94 points (0.09%) to 14,857.71 points.
IN ASIA
The Tokyo Stock Exchange hit a record high in almost 34 years, supported by rising technology stocks and a weak yen that benefits exporters. The Nikkei index gained 2.01% to 34,441.72 points and the broader Topix gained 1.35% to 2,445.61 points.
Drugmaker Daiichi Sankyo jumped 5.22%, the main contributor to Topix’s performance.
Sentiment remains degraded on the Chinese markets in the absence of a catalyst, while the indices hit their lowest level since February 2019. The Shanghai SSE Composite lost 0.39%, the CSI 300 0.28%, the Hong Kong index Hang Seng 0.79%.
RATE
US yields remain stable in a wait-and-see environment.
The ten-year Treasury yield is standing still at 4.0245%, while the two-year rate is down 1.5 basis points at 4.358%.
CHANGES
Currency markets are calm ahead of the release of inflation data on Thursday.
The dollar is stable against a basket of reference currencies, while the euro stagnates at $1.0928 and the pound sterling loses 0.09% to $1.2694.
In Asia, the yen fell 0.3% to 144.91 yen per dollar, while the Australian dollar rose 0.21% to 0.6696 dollars.
OIL
Oil is showing little progress, with sources citing figures from the American Petroleum Institute indicating that US crude inventories fell by 5.21 million barrels last week.
Brent advanced 0.45% to $77.94 per barrel, with American light crude (West Texas Intermediate, WTI) gaining 0.54% to $72.63.
(Written by Corentin Chappron, edited by Bertrand Boucey)
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