PARIS (Reuters) – European stock markets are expected to increase at the opening on Tuesday before the last session preceding the next decision of the Federal Reserve, also rich in data for the euro zone.

Futures contracts suggest an opening up 0.16% for the Parisian CAC 40, compared to 0.12% for the FTSE in London, 0.10% for the EuroStoxx 50 and uncertain for the Dax in Frankfurt.

European markets will be closed on Wednesday for Labor Day and investors will seek to position themselves on Tuesday for the next meeting of the Federal Reserve.

The US central bank is expected to maintain rates at their current levels, but investors will be especially attentive to statements from its president, Jerome Powell, who could provide more guidance on the future trajectory of rates.

In fact, the latest data published in the United States show that inflation remains persistent, while activity remains resilient, keeping rate cuts at bay.

“The recent higher-than-expected inflation figures and subsequent upward revisions have likely eroded the Fed’s confidence in the ability of inflation to return to its target more sustainably,” notes economist Xiao Cui. senior at Pictet Wealth Management.

“The Fed likely needs to see a slowdown in inflation over several months before cutting rates, and with a strong labor market, there is no rush to do so.”

A series of indicators will also liven up trade in Europe on Tuesday. Eurozone inflation and GDP figures for the bloc and its two main economies, France and Germany, should highlight the gap between the dynamism of activity in the United States and the weakness of growth European.

A WALL STREET

The New York Stock Exchange ended higher on Monday, driven by technology stocks, on the eve of the Fed’s two-day meeting.

The Dow Jones index gained 0.38%, or 146.43 points, to 38,386.09 points. The broader Standard & Poor’s 500 gained 16.21 points, or 0.32% to 5,116.17 points. The Nasdaq Composite advanced 55.18 points (0.35%) to 15,983,084.

Tesla soared (+15.3%), the American automobile group having overcome regulatory obstacles which prevented it from deploying its FSD autonomous driving software in China.

IN ASIA

The Tokyo Stock Exchange rose after closing on Monday, supported by the good performance of Wall Street. The Nikkei index gained 1.24% to 38,405.66 points, while the broader Topix gained 2.11% to 2,743.17 points.

Semiconductor-related stocks posted significant gains. Tokyo Electron gained 1.96%, silicone wafer manufacturer Shin-Etsu Chemical advanced 4.32%, while investor SoftBank rose 1.39%.

Chinese continental indices are hesitant before the next Fed meeting. Continental stock markets will be closed from Wednesday until May 6 on the occasion of Labor Day. The Hong Kong Hang Seng index is stable like the Shanghai SSE Composite, while the CSI 300 erodes by 0.18%.

RATE

US yields vary little ahead of the Fed’s next decision.

The ten-year Treasury yield is holding steady at 4.6178%, while the two-year rate remains at 4.9768%.

The German ten-year yield fell 1 bp to 2.515%, while that of the two-year rate stagnated at 2.954%.

CHANGES

The yen declines against the dollar but remains well above its 34-year low reached on Monday, while the Japanese government has not officially confirmed having intervened on foreign exchange.

In Asia, the yen fell by 0.28% to 156.77 yen per dollar, the Australian dollar fell by 0.76% to 0.6516 dollars.

The dollar strengthened by 0.28% against a basket of reference currencies before the Fed meeting, while the euro fell by 0.24% to 1.0693 dollars and the pound sterling 0.26% to 1 .2528 dollars.

OIL

Crude is eroding, discussions around a ceasefire in the Gaza Strip dispelling fears of a regional conflagration, while operators position themselves before the Fed’s next monetary policy meeting.

Brent fell 0.24% to $88.19 per barrel, with US light crude (West Texas Intermediate, WTI) losing 0.31% to $82.37.

(Written by Corentin Chappron, edited by Jean-Stéphane Brosse)

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