by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected to decline on Tuesday for another session poor in macroeconomic indicators, the next big meeting being the publication on Wednesday of the minutes of the last monetary policy meeting of the American Federal Reserve ( Fed).

According to the first available indications, the Parisian CAC 40 should lose 0.32% at the opening. The Dax in Frankfurt could fall 0.25%, while the FTSE 100 in London is expected to drop 0.54%. The EuroStoxx 50 index is expected to fall by 0.28%.

Indices which are close to their historic highs, driven by expectations of a Fed rate cut following last week’s publication of monthly consumer price figures in the United States, should consolidate their recent gains.

Especially since several members of the FOMC, the Fed’s monetary policy committee, stressed on Monday that the persistence of inflation should encourage the central bank to be cautious.

The “minutes” of the Fed meeting on April 30 and May 1, expected Wednesday at 6:00 p.m. GMT, should provide new clues about the extent of the debates within the American central bank as the market now expects two reductions in key rates in the United States this year, the first in September and the second in November or December.

For today’s session, monthly producer prices in Germany, Europe’s largest economy, are the only major indicator. They could give a trend of inflation dynamics in the currency bloc.

A WALL STREET

The New York Stock Exchange ended in mixed order on Monday, with the Nasdaq having reached a record while awaiting Nvidia’s results.

The Dow Jones index fell 0.49%, or 196.58 points, to 39,790.96 points.

The broader Standard & Poor’s 500 gained 2.13 points, or 0.04%, to 5,305.40 points.

The Nasdaq Composite advanced 96.33 points, or 0.58%, to 16,782.29 points.

Nvidia, which will publish its accounts on Wednesday, gained 2.48% with a semiconductor index up 2.15%.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index fell by 0.07% to 39,043.86 points, the market also catching its breath there. The broader Topix lost 0.1% to 2,765.34 points.

“Investors are selling stocks because they have become cautious and the index has risen too much,” said Fumio Matsumoto, chief equity strategist at Okasan Securities.

“The market does not believe that the Nikkei can regain the level of 40,000 points in the near future,” he added.

The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) lost 0.6%.

In China, the Shanghai SSE Composite fell by 0.46% and the CSI 300 fell by 0.45%. The indices are being dragged down by cyclical stocks, the effect of announcements of “historic measures” in Chinese real estate starting to fade.

EXCHANGES/RATES

The dollar is almost stable (+0.02%) against a basket of reference currencies, after an increase of 0.1% on Monday.

The euro gains 0.04%, to 1.0859 dollars, while the pound sterling trades at 1.2707 dollars (+0.02%).

In the cryptocurrency market, ether (+4.23% to $3,648.78) and bitcoin (+1.99% to $70,909) hit new six-week highs on speculation that the Securities and Exchange Commission (SEC), the stock market watchdog in the United States, could approve a spot ETF (exchange traded fund) on ether.

The yield on ten-year US Treasury bonds is stable at 4.4433%, after a slight increase of 1.7 points on Monday.

OIL

Oil prices, which ended in the red on Monday, fell again on Tuesday, weighed down by the prospect of high interest rates in the United States which could affect demand.

Brent fell by 0.65% to $83.17 per barrel and American light crude (West Texas Intermediate, WTI) by 0.60% to $79.32.

“Fears of weaker demand have led to selling as the prospect of a Fed rate cut recedes,” said Toshitaka Tazawa, analyst at Fujitomi Securities.

(Written by Claude Chendjou, edited by Bertrand Boucey)

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