by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected to rebound on Wednesday, with data published the day before on employment in the United States having reinforced hopes of a cut in interest rates from the American Federal Reserve (Fed) .

Today’s session will, however, be marked by the publication of indicators on services activity in Europe and the United States, as well as the monetary policy decision of the Bank of Canada (BoC), on the eve of that of the European Central Bank (ECB), which could influence the trend.

According to the first available indications, the Parisian CAC 40 should gain 0.64% at opening. The Dax in Frankfurt could advance 0.54%, while the FTSE 100 in London should gain 0.64%. The EuroStoxx 50 index is expected to increase by 0.56%.

The number of job openings in the United States fell more than expected in April, the Job Openings and Labor Turnover Survey (Jolts) report showed on Tuesday, fueling the prospect of an acceleration of the easing schedule monetary policy of the Fed. Traders now anticipate a 65% probability of a Fed rate cut in September, compared to a 45% probability before the publication of this indicator.

“This statistic seems to confirm that the American labor market is slowing down,” underline ING economists as the official monthly employment report will be published on Friday.

Another element of optimism: the Bank of Canada, one of the first to begin the current cycle of monetary tightening in 2022 to combat persistent inflation, is expected to reduce its main key rate to 4.75 this Wednesday at 1:45 p.m. GMT %, while a 25 basis point cut in ECB rates is also expected on Thursday.

Before that, investors will take note a little before 8:00 a.m. of the PMI data in the services sector in the main European countries and at 2:00 p.m. GMT of the ISM for services in the United States. Monthly producer prices in the euro zone will also be monitored. These indicators will provide information on the evolution of the economy, whereas at the start of the week, a statistic on American manufacturing activity raised questions about the solidity of the economy.

A WALL STREET

The New York Stock Exchange ended slightly higher on Tuesday, after a seesaw session.

The Dow Jones index gained 0.36%, or 140.26 points, to 38,711.29 points.

The broader S&P-500 gained 7.94 points, or 0.15%, to 5,291.34 points.

The Nasdaq Composite advanced 28.38 points (0.17%) to 16,857.05 points.

High-growth stocks, including Amazon, Meta Platforms and Microsoft, ended the session higher, after initially falling.

Amid concerns about oil demand, which is weighing on prices, Exxon Mobil and Chevron declined.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index fell by 0.89% at the close to 38,490.17 points, penalized by the strengthening of the yen and the decline in values ​​sensitive to the economic situation, in reaction to the slowdown in the labor market. in the USA. The broader Topix lost 1.41% to 2,748.22 points.

Toyota Motor dropped 2.43%, weighing heavily on the Topix.

The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) however gained 0.76%.

In China, the Shanghai SSE Composite fell by 0.47% and the CSI 300 fell by 0.28%, the indices being pulled down by the consumption (-0.95%) and real estate compartments. (-2.06%).

Indicators-wise, services activity in China accelerated in May at the fastest pace in 10 months while employment in the sector increased for the first time since January, shows a private sector survey suggesting a recovery sustained in the second quarter.

VALUES TO FOLLOW IN EUROPE:

EXCHANGES/RATES

The dollar rose by 0.11% against a basket of reference currencies before the publication of monthly data on services in the United States. However, the ticket is still close to a two-month low, around 104 points.

The euro fell by 0.06%, to 1.0871 dollars, while the pound sterling traded at 1.2764 dollars (+0.01%).

The yield on ten-year US Treasury bonds is stable at 4.3435%, after reaching a nearly three-week low on Tuesday at 4.314% following the publication of the Jolts survey.

The yield on the German Bund of the same maturity is practically unchanged, at 2.54%.

OIL

The oil market is near a four-month low in Asian trading as investors continue to digest Sunday’s OPEC+ decisions.

Brent, which lost more than a dollar on Tuesday, fell again on Wednesday, by 0.08% to 77.46 dollars per barrel, while American light crude (West Texas Intermediate, WTI) lost 0.12% to 73 .16 dollars.

(Written by Claude Chendjou, edited by Jean-Stéphane Brosse)

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