PARIS (Reuters) – European stock markets are expected to open higher on Tuesday, while a few indicators are expected during the session.

Futures contracts suggest an opening increase of 0.13% for the Parisian CAC 40, against a rise of 0.07% for the FTSE in London, 0.21% for the Dax in Frankfurt, and 0.26% for the EuroStoxx 50.

US producer prices for July will be released at 1230 GMT, as observers of the US economy seek to understand whether price dynamics are coming back under the control of the Federal Reserve.

The indicator will be all the more important as it will help operators position themselves for the publication of CPI inflation on Wednesday, the most anticipated indicator this week and capable of causing the markets to react brutally, which are betting on rate cuts by the Fed as early as September.

But the central bank has insisted it will cut rates based on whether it meets its twin mandates of employment and inflation, and more resilient price dynamics than expected could limit the extent of the Fed’s rate cuts.

Thursday’s release of new jobless claims will also be closely watched, as investors worry about the slowing U.S. economy and will be watching for any further signs of weakness in labor markets.

Raphael Bostic, a member of the Fed’s Monetary Policy Committee, is also expected to speak on Tuesday and could give more indications of his perception of activity across the Atlantic.

In the eurozone, the ZEW sentiment indicator expected at 09:00 GMT should confirm the slowdown in activity in Germany, the bloc’s largest economy.

In the UK, unemployment figures released on Tuesday surprised sharply to the downside, as earnings growth continued to normalise, suggesting that jobs markets remain resilient without fuelling inflationary pressures.

VALUES TO FOLLOW:

ON WALL STREET

The New York Stock Exchange closed in mixed order on Monday, the first day of a week rich in the publication of economic indicators, which could give indications on the next decisions of the American Federal Reserve (Fed) in terms of rates, expected in September.

The Dow Jones Industrial Average fell 0.36 percent, or 140.53 points, to 39,357.01. The broader Standard & Poor’s 500 Index gained 0.23 points to 5,344.39. The Nasdaq Composite Index gained 35.31 points, or 0.21 percent, to 16,780.61.

IN ASIA

Japanese stocks ended sharply higher, buoyed by technology stocks as calmer currency markets encouraged investors to return to risky assets. The Nikkei index gained 3.45 percent to 36,232.51 points. The broader Topix gained 2.83 percent to 2,553.55 points.

Semiconductor manufacturing equipment specialist Tokyo Electron gained 6.2% while rival Advantest climbed 7.3%.

Chinese indices are eroding as sentiment remains weak and liquidity is low in the middle of summer. Hong Kong’s Hang Seng index is up 0.06%, Shanghai’s SSE Composite is down 0.14%, and the CSI 300 is down 0.18%.

RATE

Yields are weak in the United States ahead of Tuesday’s release of producer prices.

The yield on the 10-year Treasury note was unchanged at 3.9131%, while the yield on the two-year note was unchanged at 4.0146%.

The yield on the German ten-year fell by -0.1 bp to 2.225%, while that of the two-year rate lost -0.3 bp to 2.393%.

CHANGES

The yen continues to decline in the absence of catalysts.

In Asia, the yen declined by 0.36% to 147.72 yen per dollar, the Australian dollar rose by 0.02% to 0.6586 dollars.

The dollar fell 0.03% against a basket of benchmark currencies, the euro rose 0.05% to $1.0937, and the pound strengthened 0.31% to $1.2803.

OIL

Oil is eroding as OPEC on Monday lowered its outlook for demand growth in 2024 due to weak Chinese growth.

Brent fell by 0.8% to $81.64 per barrel, while US light crude (West Texas Intermediate, WTI) weakened by 0.71% to $79.49.

(Blandine Henault)

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