PARIS (Reuters) – The New York Stock Exchange is set to open mixed on Monday as Europe struggles to find direction mid-session due to uncertainty over the Federal Reserve’s decision after its policy meeting on Tuesday and Wednesday.

New York index futures suggest a hesitant opening for Wall Street, with the Dow Jones up 0.21%, the Standard & Poor’s 500 stable and the Nasdaq down 0.22%.

In Paris, the CAC 40 gained 0.07% to 7,470.45 points at around 11:00 GMT. The Dax in Frankfurt dropped 0.28% while the FTSE in London fell 0.05%.

The pan-European FTSEurofirst 300 index gained 0.05%, as did the EuroStoxx 50, and the Stoxx 600 rose 0.08%.

Monetary observers and policymakers appear divided over the size of the rate cut expected from the Fed, which should mark the start of a cycle of easing by the central bank.

Since the pivot taken during the Jackson Hole symposium in August, the institution has emphasized its objective of full employment, judging that its objective of price stability is close to being achieved.

However, data on the US job market sends mixed signals: while the number of jobs created is down, the unemployment rate fell in August.

Goldman Sachs sees this as evidence of the strength of the jobs market and an abundant supply of labor in the United States, but other observers, such as Pictet Wealth Management, fear that the fragility of labor demand could force the Fed to lower its rates more aggressively than the markets anticipate.

The vast majority of economists polled by Reuters expect a 25 basis point rate cut on Wednesday, while money markets say a 50 basis point cut is 60 percent likely.

“Inflation is visibly cooling and the current degree of tightening is no longer necessary. The Fed could then choose, from a risk management perspective, to ease its policy quickly in order to avoid a rise in unemployment,” comments Paolo Zanghieri, senior economist at Generali Investments, who expects a cut of 25 basis points in September, but possibly 50 basis points in November and December.

VALUES TO FOLLOW ON WALL STREET

The strike by more than 30,000 Boeing workers entered its fourth day on Monday, with negotiations with management set to resume on Tuesday.

Intel may get $3.5 billion in federal grants to make semiconductors for the U.S. Department of Defense, Bloomberg News reported Friday.

VALUES TO FOLLOW IN EUROPE

Icade (+3.5%) and Ipsen (+5.5%) are both up after recommendation upgrades.

Rexel is up 9.32% after rejecting a takeover proposal by QXO, the group owned by billionaire Brad Jacobs, for 8.46 billion euros on Sunday.

Animal health specialist Virbac climbed 6.61% after reporting better-than-expected half-year profit and confirming its annual forecast.

Phoenix Group shares fell 3.38% after the group announced on Monday that it had suspended the sale of its SunLife division due to regulatory uncertainty.

RATE

Yields are hesitant in a wait-and-see context.

The yield on the German ten-year bond remains at 2.147%, and that of the two-year rate at 2.214%.

The 10-year Treasury yield was steady at 3.6457%, while the two-year yield fell 1 bps to 3.5655%.

CHANGES

Traders are bracing for a 50 basis point rate cut from the Fed, which would close the rate gap between the United States and the rest of the world.

The dollar fell 0.44% against a basket of benchmark currencies, the euro rose 0.42% to $1.1122 and the pound strengthened 0.54% to $1.3193.

OIL

The price of a barrel is rising modestly despite the latest Chinese data, which suggests a weakening of demand from the world’s second largest economy, as American production in the Gulf of Mexico remains constrained.

Brent rose 0.47% to $71.95 per barrel, while American light crude (West Texas Intermediate, WTI) rose 0.61% to $69.07.

(Written by Corentin Chappron, edited by)

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