by Claude Chendjou
PARIS (Reuters) – European stock markets ended with slight variations on Wednesday and Wall Street was almost standing still mid-session in a wait-and-see context ahead of the monetary policy decisions of the American Federal Reserve (Fed).
In Paris, the CAC 40, rich in luxury values, ended down 0.48% at 8,161.41 points after the warning from Kering, whose action plunged 11.91%. The British Footsie lost 0.01%. The German Dax gained 0.14% thanks in particular to the defensive community services sector.
The EuroStoxx 50 index fell by 0.15% and the FTSEurofirst 300 by 0.03%. The Stoxx 600, penalized by the cyclical consumption compartment (-0.68%), particularly luxury (-1.73%), nevertheless managed to finish stable.
At the close in Europe, the Dow Jones advanced by 0.13%, the Standard & Poor’s 500 by 0.05% and the Nasdaq by 0.06%.
Gains on Wall Street are weak as the Fed is due to publish a statement from its monetary policy meeting at 6:00 p.m. GMT where interest rates are expected to remain at their current level for the fifth time in a row.
The resilience of the American economy and the persistence of inflationary pressures have, however, recently led to a review of the timing and extent of the Fed’s rate cut for the next meetings.
“The market is completely undecided as to the number of rate cuts from the Fed,” underlines Mathieu Savary, chief strategist at BCA Research, who evokes a lottery between two and three cuts for the moment.
Traders, for their part, are now only counting on a probability of 64% for a rate cut in June compared to a probability of 71% last week, according to the CME Group’s Fedwatch barometer.
VALUES IN EUROPE
In Paris, Kering recorded its worst session on Wednesday, as the luxury group warned that first-quarter sales of its flagship brand Gucci would fall by around 20% due to weak demand in Asia.
In the wake, the French group LVMH lost 1.62%, while the Swiss Richemont fell by 2.18% and the British Burberry by 3.29%.
On the SBF 120, Valneva plunged 11.9% after reporting a 2023 turnover down compared to 2022.
Eutelsat gained 2.77% following the announcement of a new partnership with Intelsat.
Bureau Veritas advanced 1.97% after revealing its financial ambitions by 2028.
In Zurich, Lonza jumped 5.68%, the Swiss manufacturer of biopharmaceutical products having announced the purchase of the Roche factory in California for 1.2 billion dollars (1.1 billion euros).
In London, Johnson Matthey climbed 7.76%, as the manufacturer of catalytic converters and anti-pollution filters announced the sale of its medical devices business to Montagu Private Equity for $700 million.
TODAY’S INDICATORS
Producer prices in Germany showed a more marked decline than expected in February, of 4.1% year-on-year, according to the Federal Statistical Office.
Inflation in the United Kingdom slowed more than expected year-on-year in February, by 3.4%, according to the Office for National Statistics (ONS).
Consumer confidence in the euro zone stood at -14.9 in March, compared to -15.5 in February, show preliminary figures published by the European Commission.
CHANGES
The dollar rose slightly, by 0.07%, against a basket of reference currencies before the Fed’s announcements.
The yen fell to 151.94 per dollar on Wednesday, its lowest since October 2022, the day after the Bank of Japan (BoJ) decided to raise its key rates for the first time in 17 years. However, the Japanese currency continues to suffer from the yield gap between US Treasury bills and Japanese government bonds.
The euro, down 0.06%, stood at 1.0859 dollars, despite attempts by the European Central Bank (ECB) to mitigate expectations of rate cuts.
The pound sterling is trading at $1.2716 (-0.03%), appearing to ignore falling inflationary pressures in the United Kingdom.
RATE
Bond yields in Europe and the States are generally stable before the Fed’s announcements: that of the ten-year German Bund ended down 1.5 basis points, at 2.432%, while its American equivalent of the same maturity is displays at 4.2787%, down 1.7 points.
OIL
Oil prices fell on Wednesday after reaching multi-month highs the day before in a context of caution ahead of Fed decisions.
Brent lost 1.8% to $85.81 per barrel after hitting its highest Tuesday since October 31 at $87.38. American light crude (West Texas Intermediate, WTI) dropped 2.17% to $81.66.
(Written by Claude Chendjou, edited by Zhifan Liu)
Copyright © 2024 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
