by CORENTIN CHAPRON

PARIS (Reuters) – European stock markets are expected to be uncertain at the opening on Tuesday, with several monetary policy makers due to speak during the session while crucial inflation indicators will be published at the end of the week.

Futures contracts suggest a stable opening for the Parisian CAC 40, the FTSE in London, the Dax in Frankfurt, and up 0.1% for the EuroStoxx 50.

The FTSE was closed on Monday and could catch up, with European markets closing higher last session.

Numerous comments from monetary policy makers are expected, while a conference on central banks organized by the Bank of Japan attracted many big financiers to Tokyo.

On the European Central Bank (ECB) side, members of the Governing Council Klaas Knot and Mario Centeni are expected to speak during the day. The ECB’s chief economist, Isabel Schnabel, stressed on Tuesday that quantitative easing could have helped limit the impact of rate hikes.

Inflation expectations in the euro zone, a crucial indicator for the conduct of monetary policy since it measures players’ confidence in central banks, will also be published on Tuesday.

On the Fed side, Monetary Policy Committee members Neel Kashkari, Lisa Cook and Mary Daly will speak during the session.

Their colleague Loretta Mester argued on Tuesday for longer US monetary policy statements, while Michelle Bowman said the pace of quantitative tightening was too fast for her liking.

These indicators will be dissected by investors, looking for additional elements on the posture of central banks before the publication on Friday of inflation indicators for May in the euro zone, Japan and the United States, by far the meetings the most important of the week.

On Tuesday, producer prices for services in Japan were also published, higher than expected and which confirm that the inflationary dynamic is taking root in the archipelago.

AT WALL STREET

The New York Stock Exchange was closed Monday for a public holiday.

IN ASIA

The Tokyo Stock Exchange ended mixed on Tuesday as investors reassessed their rate outlook for the Bank of Japan. The Nikkei index lost 0.11% to 38,855.37 points and the broader Topix gained 0.08% to 2,768.50 points.

Semiconductor groups have retreated under the pressure of profit-taking. Semiconductor production equipment supplier Tokyo Electron declined 0.42%, chip test equipment makers Advantest and Lasetec dropped 1.15% and 3.23%, respectively.

Chinese indices are falling, with investors positioning themselves ahead of US inflation figures. The Hong Kong Hang Seng index lost 0.16%, the Shanghai SSE Composite 0.36%, the CSI 300 0.62%.

RATE

Trading on US rates resumes after Monday’s holiday, and yields fall moderately.

The ten-year Treasury yield fell 1.6 bps to 4.4571%, while the two-year rate eroded 1.8 bps to 4.9354%.

The German ten-year yield is stable at 2.555%, while that of the two-year rate remains at 3.041%.

CHANGES

The dollar is falling sharply as investors position themselves for the release of new inflation figures later this week.

The dollar declined by 0.14% against a basket of reference currencies, while the euro gained 0.17% to 1.0876 dollars, and the pound sterling 0.07% to 1.2776 dollars.

In Asia, the yen strengthened by 0.04% to 156.8 yen per dollar, the Australian dollar gained 0.2% to 0.6664 dollars.

OIL

Data from research group OAG shows that travel is picking up in the United States and fuel demand could be high across the Atlantic this summer, supporting crude and particularly American grades.

Brent rose 0.07% to $83.16 per barrel, with American light crude (West Texas Intermediate, WTI) gaining 1.38% to $78.79.

(Written by Corentin Chappron, edited by Blandine Hénault)

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