by Diana Mandia

(Reuters) – Wall Street is expected to be in disarray and European stock markets fall mid-session on Thursday, with investors avoiding risk ahead of the European Central Bank’s (ECB) interest rate decision later in the day.

Futures on New York indices signal an opening on Wall Street down 0.09% for the Dow Jones, and up 0.02% for the Standard & Poor’s-500. The Nasdaq should open up 0.06%. In Paris, the CAC 40 lost 0.53% to 7,416.19 around 11:55 GMT. In Frankfurt, the Dax lost 0.38% and in London, the FTSE 0.19%.

The pan-European FTSEurofirst 300 index fell by 0.28%, the Eurozone EuroStoxx 50 by 0.3% and the Stoxx 600 by 0.31%. The latter jumped more than 1% on Wednesday.

The ECB will publish its monetary policy decision at 1:15 p.m. GMT, before commenting on it during a press conference at 1:45 p.m. GMT.

If the markets widely expect a pause at the current level of 4%, the Frankfurt-based institution should disappoint the hopes of investors, who anticipate monetary easing from the spring, despite the risks of recession and the rapid slowdown of the ‘inflation.

Markets are pricing in nearly 130 basis points (bps) of cuts this year, down from 150 bps two weeks ago.

“Even though price increases have slowed rapidly and economies are weakening, the ECB is concerned that underlying pressures on services prices remain strong,” analyst Susannah Streeter wrote in a note. at Hargreaves Lansdown.

In Norway, the central bank on Thursday kept its main key interest rate unchanged at 4.50%, as expected, while specifying that the cost of borrowing would probably remain at this level “for some time”.

Investors also learned Thursday that the morale of German entrepreneurs deteriorated in January for the second consecutive month, while Europe’s largest economy is struggling to emerge from recession, according to the business climate index published by the Ifo institute.

In France, the business climate in industry remained stable in January compared to the previous month, according to the monthly business survey published Thursday by INSEE.

VALUES TO FOLLOW AT WALL STREET

The New York Stock Exchange is expected to open in scattered order, awaiting the publication of fourth-quarter US GDP on Thursday at 1:30 p.m. GMT and the PCE inflation indicator scheduled for Friday.

VALUES IN EUROPE

In terms of values, STMicroelectronics lost 3.7% after announcing Thursday that its turnover in the first quarter would fall by more than 15% year-on-year.

Nokia, which reported a 27% drop in fourth-quarter operating profit on Thursday, while beating expectations, grew by more than 7%.

The banking sector was down -0.42%, with Spanish group Bankinter falling 5.8% after its fourth quarter profit missed market expectations.

The lowering of the UniCredit recommendation (-1.9%) by Deutsche Bank also contributes to the sector’s losses.

Givaudan increased by 5.9% after the Swiss perfume manufacturer announced profits for 2023 in line with expectations.

RATES Mandatory yields in the euro zone are stable on Wednesday before the ECB.

The German ten-year yield nibbles 1.7 basis points to 2.353%, and that of the two-year rate 1.2 bps to 2.722%.

The American bond markets are also moving slightly, with the ten-year bond market at 4.1568%, and the two-year bond market at 4.3778%.

FOREIGN EXCHANGE Foreign exchange markets remain calm before the ECB’s decision.

The dollar is stable (-0.03%) against a basket of reference currencies, and the euro nibbles 0.09% to 1.0893 dollars.

OIL

Oil prices are rising after the Chinese central bank’s economic stimulus measures and after U.S. crude inventories fell much more than expected last week.

Brent rose 1.31% to $81.09 per barrel, with American light crude (West Texas Intermediate, WTI) increasing 1.45% to $76.18 CLc1.

(Some data may have a slight lag)

(Written by Diana Mandiá)

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