PARIS (Reuters) – The main European stock markets are on a sluggish trend on Tuesday morning as the American Federal Reserve begins a two-day monetary policy meeting which calls for caution.

In Paris, the CAC 40 rose 0.13% to 8,158.36 points around 08:50 GMT. In London, the FTSE 100 gained 0.05% and in Frankfurt, the Dax gained 0.15%.

The EuroStoxx 50 index increased by 0.10%, the FTSEurofirst 300 was unchanged and the Stoxx 600 gained 0.04%.

Futures contracts on Wall Street forecast an increase of 0.01% for the Dow Jones, a decrease of 0.05% for the Standard & Poor’s 500 and a decline of 0.13% for the Nasdaq the day after a session in the green, driven by “tech” while Nvidia opened its annual conference dedicated to developers.

In Japan, the Bank of Japan (BoJ) ended its negative interest rate policy on Tuesday by deciding on a first increase in the cost of credit in 17 years, a decision anticipated by experts which did not impact on financial markets.

The market is now awaiting announcements from the Fed on Wednesday. While a new status on rates is expected immediately, doubts remain about the timing and extent of the first drop in the cost of credit across the Atlantic given the solidity of the latest macroeconomic data.

Traders currently forecast with a 54.7% probability that the Fed will cut rates in June, a lower probability than in previous weeks, according to CME Group’s Fedwatch barometer.

In the euro zone, the vice-president of the European Central Bank (ECB) declared on Tuesday that the institution was ready to discuss a rate cut in June.

Investors are also waiting at 10:00 GMT for the publication of the ZEW index of economic sentiment and figures for the evolution of wages and labor costs in the euro zone. These statistics could provide the ECB with information on the situation in the bloc with a view to a possible reduction in key rates.

On the bond market, the yield on the ten-year German Bund is stable at 2.451%, while that of its American equivalent falls marginally, by 1.6 points, to 4.3243%.

On the European stock market, the decline in the new technologies sector (-0.24%) limits gains on the Stoxx 600.

In individual stocks, Atos plunged 19.04% after ending its discussions with Airbus (+1.44%) for the sale of its BDS (Big Data & Security) activity.

Unilever jumped 4.63% as the consumer goods group announced plans to transform its ice cream division into a standalone business, following a new savings program that will result in the loss of 7,500 jobs.

AstraZeneca fell (-0.77%) after Tuesday’s announcement of the acquisition of oncology specialist Fusion Pharmaceuticals for around two billion dollars (1.84 billion euros).

(Writing by Claude Chendjou, edited by Kate Entringer)

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