by Augustin Turpin

(Reuters) – Wall Street is expected to rise on Monday and European stock markets are moving into positive territory mid-session, after the S&P 500’s closing record on Friday, and as investors prepare ahead of the European Central Bank’s decision ( BCE) and the publication of key indicators at the end of the week.

Futures on New York indices signal an opening up 0.15% for the Dow Jones, 0.31% for the Standard & Poor’s-500 and 0.58% for the Nasdaq. In Paris, the CAC 40 was up 0.53% at 7,410.94 around 11:20 GMT. In Frankfurt, the Dax increased by 0.42% and in London, the FTSE gained 0.06%.

The pan-European FTSEurofirst 300 index gained 0.43%, the Eurozone EuroStoxx 50 gained 0.49% and the Stoxx 600 advanced 0.45%.

In the absence of key indicators on Monday, European stocks continued to rise, benefiting from the American dynamic which brought the S&P 500 to a historic record closing on Friday, thanks to the progression of tech stocks. The tech compartment of the Stoxx 600 leads the progression of the European index on Monday, Bernstein having notably raised his recommendation on ASML to “outperform”.

Markets are positioning themselves ahead of many expected events this week, including the Bank of Japan’s next monetary policy decision on Tuesday, PMI indicators for the eurozone on Wednesday, the ECB’s rate decision on Thursday and, finally, the PCE inflation in the United States for December on Friday.

This data should give new indications on the trajectory of rates at the start of 2024, the optimistic scenario of a first cut in the spring having animated the markets at the end of last year.

“No new policy decision is expected, but the market would be on the lookout for any hints regarding the first rate cut,” said Mohit Kumar, an analyst at Jefferies.

Traders on average expect the ECB to cut interest rates by around 100 basis points this year, with a 96% chance that the first cut will take place in June.

VALUES IN EUROPE

The FDJ soars by 6% after launching a takeover bid on the online gaming group Kindred Group on Monday, an operation at the end of which the French group aims to become the European number two in the sector.

Worldine takes 3.7% after Crédit Agricole announced that it holds a minority stake in the payments group.

The red lantern of the CAC 40, Air Liquide lost 0.9% after Stifel lowered its recommendation to “hold” from “buy”.

The European banking sector is also in the green, driven by a 2.6% rise in Barclays following upbeat comments from Morgan Stanley, while Commerzbank falls 3.1% after BofA Global Research lowered its recommendation to “neutral” to “underperformance”. VALUES TO FOLLOW AT WALL STREET

The U.S. Federal Aviation Administration (FAA) on Sunday recommended Boeing 737-900ER operators visually inspect exit doors to ensure the component is properly secured. Boeing stock is down 1.8% pre-hours.

RATE

Euro zone bond yields fell on Monday as the gap between Italy and Germany’s 10-year borrowing costs hit its lowest level in seven months.

This “spread”, which is considered a key indicator of investor sentiment towards the most indebted countries in the euro zone, fell below 154 basis points (bp) in early trading.

The yield on the ten-year German Bund lost 4.5 basis points to 2.26% and that of the two-year rate fell by 3.7 bp to 2.692%.

US bond markets are also falling, with the ten-year Treasury yield losing 4.1 basis points to 4.1052%.

CHANGES

The US dollar is relatively stable (-0.04%) against a basket of reference currencies, while the euro loses 0.08% to 1.0888 dollars.

OIL

Oil prices are little changed as a weak outlook for global oil demand is offset by tensions in the Middle East and the attack on a Russian fuel export terminal over the weekend.

Brent rose 0.03% to $78.58 per barrel and American light crude (West Texas Intermediate, WTI) rose 0.35% to $73.67.

NO MAJOR ECONOMIC INDICATORS EXPECTED ON JANUARY 22

(Written by Augustin Turpin, edited by Blandine Hénault)

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