by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected on a sluggish note on Wednesday after several sessions in the green and before the announcement of the decisions of the American Federal Reserve (Fed), as well as the publication of numerous results and economic indicators, including monthly inflation figures in several eurozone countries.

According to the first available indications, the Parisian CAC 40, which recorded a historic record on Wednesday at 7,686.03 points, should lose 0.09% at the opening on Wednesday after five consecutive sessions of increase. The Dax in Frankfurt could fall by 0.11%. The FTSE 100 in London is expected to gain 0.06%. The EuroStoxx 50 index is expected to fall by 0.11%.

The Fed will issue a monetary policy statement at 19:00 GMT at the end of two days of FOMC debates, which will be followed half an hour later by a press conference by its chairman, Jerome Powell, during which the The market hopes to detect clues about the evolution of interest rates.

Traders are mainly counting on a status quo for this meeting before a first rate cut by the Fed in April, but the probability of a reduction in the cost of credit from March still receives almost 50% of the votes.

Before the Fed’s announcements, the publication at 1:15 p.m. GMT of the monthly ADP survey on private employment in the United States, a prelude to the official report on the subject scheduled for Friday, should provide elements on the situation of the labor market, whose dynamism raises fears that the American central bank will delay the timetable for its monetary easing.

In Europe, while waiting for the publication of inflation figures for the entire euro zone on Friday, the market will learn in the morning of price developments in France and Germany for the month of January.

On the results side, a flurry of publications should liven up the discussions, including those in Europe from Novo Nordisk, H&M and Santander, while in the United States, Microsoft and Alphabet are down in out-of-session transactions after their results.

A WALL STREET

The New York Stock Exchange ended in mixed order on Tuesday, with only the Dow Jones recording an increase, while investors were cautious after a series of quarterly results.

The Dow Jones index gained 0.35% to 38,467.31 points.

The broader S&P-500 lost 0.06% to 4,924.97 points.

The Nasdaq Composite fell 0.76% to 15,509.90 points.

While the S&P-500 marked a slight decline after reaching a peak during the session, the day after its closing record, the Nasdaq was weighed down in particular by major technology stocks including Apple, Amazon and Alphabet. Of the 144 S&P-500 companies that have already reported their results, 78% have beaten expectations, according to LSEG data, but analysts overall expect their results to show growth of 5.5% year-over-year , compared to a forecast of +4.7% at the beginning of January. United Parcel Service fell 8.2% after a disappointing annual revenue forecast, while General Motors jumped 7.8% on better-than-expected guidance.

Boeing fell 2.3% as the American aircraft manufacturer faces increased scrutiny over the certification of its 737 MAX 7.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index advanced 0.61% to 36,286.71 points and the broader Topix gained 0.96% to 2,551.1 points at the close. With a monthly gain of around 8%, the Nikkei recorded its best performance for the entire month since 1998.

The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) lost 0.40% and is heading towards a decline of around 5% over the entire month, ending two consecutive months of gains.

In China, the Shanghai SSE Composite fell by 1.4% and the CSI 300 fell by 0.83%, the latter index at this stage losing around 6% since January, the sixth consecutive month of decline.

Official PMIs show that manufacturing activity in China contracted (49.2 points) for the fourth consecutive month in January.

Investors also remained unsatisfied in the absence of a concrete announcement from the authorities on an economic support plan expected by the markets.

VALUES TO FOLLOW IN EUROPE:

EXCHANGES/RATES

The dollar gains 0.23% against a basket of reference currencies

The euro fell by 0.21%, to $1.0817, while the pound sterling stood at $1.2674 (-0.18%).

On the bond market, the yield on ten-year US Treasury bonds fell by around four basis points, to 4.0184%.

OIL

The oil market is falling in reaction to the weakness of Chinese indicators which could have an impact on crude demand: Brent fell by 0.30% to 82.62 dollars per barrel and American light crude (West Texas Intermediate, WTI) by 0.35% to $77.55.

However, the two oil benchmarks should record a gain of more than 7% over the month as a whole.

(Writing by Claude Chendjou, edited by Kate Entringer)

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