PARIS (Reuters) – The main European stock markets are expected to fall on Tuesday, ahead of many indicators and while Japanese inflation surprised on the rise.

According to the first available indications, the Parisian CAC 40 would be down 0.19% at the opening. Futures contracts suggest a decline at the opening of 0.17% for the FTSE in London, 0.2% for the Dax in Frankfurt and 0.18% for the EuroStoxx 50.

Investors are preparing for a burst of data this week, including that on PCE inflation on Thursday in the United States, the indicator of price dynamics favored by the Federal Reserve.

Inflation in the Eurozone is expected on Friday. A stronger reading than expected would push the European Central Bank to reiterate that rates would remain restrictive for longer, a risk for European activity.

“Although European economies have generally weathered the economic storm well so far, we continue to expect weak growth in the near term… Risks have shifted to later rate cuts and fewer rather than earlier and more numerous”, summarize the Nomura strategists.

Tuesday’s publication of a stronger-than-expected inflation indicator in Japan, up 2% year-on-year for the underlying indicator versus 1.8% expected, revives fears that price pressures will not reveal more persistent than expected.

Several second-order indicators will be published on Tuesday: household confidence in Germany, France and the United States, private credit in the euro zone and the American durable goods indicator.

Large issuances of American sovereign bonds could encourage investors to be cautious: 127 billion dollars of debt will be issued on Tuesday, and 42 billion on Wednesday.

A WALL STREET

The New York Stock Exchange ended slightly lower on Monday awaiting the publication of data on inflation, consumer confidence and manufacturing activity which could influence the timetable for the expected reduction in interest rates by the Fed.

The Dow Jones index fell 0.16%, or 62.30 points, to 39,069.23 points. The broader Standard & Poor’s 500 lost 19.27 points, or 0.38% to 5,069.53 points. The Nasdaq Composite fell 20.57 points (0.13%) to 15,976.251.

IN ASIA

The Tokyo Stock Exchange ended almost flat on Tuesday, as losses in the semiconductor sector were offset by gains in the steel sector. The Nikkei index gained 0.01% to 39,239.52 points and the broader Topix gained 0.18% to 2,678.48 points.

The heavyweight of the chip sector Advantest lost 2.12%.

Chinese markets are progressing, supported by stocks linked to artificial intelligence. The Shanghai SSE Composite takes 0.6%, the CSI 300 0.55%.

RATE

US yields are stable ahead of durable goods orders and the consumer confidence indicator.

The ten-year Treasury yield fell 1.7 basis points to 4.2815%, while the two-year rate was unchanged at 4.7077%.

CHANGES

The yen strengthens after a stronger-than-expected inflation indicator.

The dollar declined by 0.07% against a basket of reference currencies, while the euro remained at $1.085 and the pound sterling at $1.2678.

In Asia, the yen strengthened by 0.13% to 150.49 yen per dollar, while the Australian dollar gained 0.11% to 0.6547 dollars.

OIL

Crude is up slightly, despite the latest comments from Jeffrey Schmid, member of the Fed’s board of governors, who recalled that the central bank must be patient before lowering its rates.

Brent advanced 0.13% to $82.64 per barrel, with American light crude (West Texas Intermediate, WTI) gaining 0.18% to $77.72.

(edited by Bertrand Boucey)

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