PARIS (Reuters) – Wall Street is expected to be mixed on Tuesday while European indices decline mid-session, caution prevailing before the publication of the minutes of the Federal Reserve’s latest monetary policy meeting.
Futures on New York indices suggest Wall Street opening in the green, with the Dow Jones and the Standard & Poor’s 500 showing no direction, while the Nasdaq drops 0.12%.
In Paris, the CAC 40 fell by 1.02% to 8,112.77 points around 10:14 GMT. The Dax in Frankfurt decreased by 0.66%, compared to 0.49% for the FTSE in London.
The pan-European FTSEurofirst 300 index fell by 0.56%, compared to 0.75% for the EuroStoxx 50 and 0.48% for the Stoxx 600.
Caution dominates trading in the absence of leading indicators, and as the minutes of the Federal Reserve’s latest monetary policy meeting are released on Wednesday.
Investors will be attentive to the debates taking place at the central bank, as restrictive comments follow one another.
After the publication of a better-than-expected CPI inflation indicator last week, investors are now worried about the American monetary trajectory, which could prove more lastingly restrictive than expected.
“The US market reversed its rate expectations after the CPI inflation release, helped by Fed officials who warned that the inflation outlook was sufficiently uncertain that rates should be held until they become clearer,” writes Kit Juckes, head of currency strategy at Société Générale.
John Plassard, director at Mirabaud, also evokes “the wake of a resurgence of nervousness with on the one hand the questions surrounding the future of the conflict in the Middle East after the death of the Iranian president and on the other a certain stress on the eve of the publication of Nvidia’s results.
VALUES TO FOLLOW IN WALL STREET
Eli Lilly said Tuesday that its drug tirzepatide has been approved in China for the treatment of type 2 diabetes.
Zoom Video Communications raised its full-year revenue forecasts on Monday, but less sharply than analysts expected.
VALUES TO FOLLOW IN EUROPE
AstraZeneca said on Tuesday it was targeting an increase of around 75% in its turnover to reach 80 billion dollars (73.65 billion euros) by 2030, and is rising by 1.41%.
Carmila advances 2.96% after Citigroup raised its recommendation to “buy” from “sell”.
Generali fell by 3.36%, the weakness of the IARD (property and damage) activity of the Italian insurer taking precedence over a better than expected net profit in the first quarter.
Saipem gains 3.29% after landing new contracts worth $3.7 billion.
SFS Group, manufacturer of fastening systems, rose 10.37% after UBS raised its recommendation from “neutral” to “buy”.
RATE
Yields decline amid caution.
The German ten-year yield weakened by 2 basis points (bp) to 2.512%, that of the two-year rate lost 1.4 bp to 2.981%.
The ten-year Treasury yield erodes by 1.1 bps to 4.4257%, while the two-year is stable at 4.8286%.
CHANGES
The euro is strengthening against the dollar, as currency traders remain uncertain about the tone of the Fed’s “minutes” expected on Wednesday.
The dollar lost 0.07% against a basket of reference currencies, the euro strengthened by 0.12% to 1.0868 dollars, and the pound sterling gained 0.07% to 1.2713 dollars.
OIL
Crude markets are worried about the US rate outlook, with a lastingly restrictive monetary policy risking weighing on oil demand.
Brent dropped 0.9% to $82.96 per barrel, American light crude (West Texas Intermediate, WTI) fell 0.86% to $79.11.
(Written by Corentin Chappron, edited by Kate Entringer)
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