PARIS (Reuters) – The main European stock markets were down slightly on Wednesday morning in a context of wait-and-see ahead of the monetary policy decisions of the American Federal Reserve (Fed).

In Paris, the CAC 40 lost 0.08% to 7,481.33 points at around 07:45 GMT. In London, the FTSE 100 dropped 0.17% and in Frankfurt, the Dax fell 0.09%.

The EuroStoxx 50 index fell by 0.10%, the FTSEurofirst 300 by 0.14% and the Stoxx 600 by 0.18%.

Futures on Wall Street are forecasting a virtually flat opening after an already sluggish session.

Market experts are still divided between a 25 or 50 basis point cut in the Fed’s federal funds rate, which will make its monetary policy decision at 1800 GMT.

Commonwealth Bank of Australia analyst Kristina Clifton expects a quarter-point rate cut from the Fed, she said, “because history shows the FOMC (Federal Monetary Policy Committee) needs a good reason to start its rate-cutting cycle with a cut of more than 25 basis points.”

“A 50 basis point cut that would scare markets about the US economic outlook could push the dollar higher, as it is a safe haven currency,” she added. A stronger dollar would also weigh on commodities.

Meanwhile, the yield on 10-year US Treasury bonds was virtually unchanged at 3.6493%, after falling the previous day to 3.599%, its lowest level since May 2023.

In Europe, the market awaits the final figures for euro zone inflation at 0900 GMT. In Britain, headline inflation stabilised at 2.2% year-on-year in August, but services inflation accelerated to 5.6% from 5.2% in July, as the Bank of England (BoE) meets on Thursday. It is expected to leave its key interest rates unchanged after cutting them on August 1.

“UK inflation remains subdued, although underlying factors continue to rise… today’s data suggests the central bank will be in no rush to deliver back-to-back monetary policy easing,” wrote Jeremy Batstone-Carr, strategist at Raymond James.

In terms of values, Carmat plunged in Paris by almost 12%, the manufacturer of artificial hearts having announced a new capital increase for an initial amount of 10.3 million euros.

Valneva is up 2.1% after submitting applications to the European Medicines Agency and Health Canada to expand the indication of its chikungunya vaccine.

Elsewhere in Europe, Campari fell around 5% to 7.2 euros, its lowest since July 2020, following the announcement of the unexpected departure of its CEO Matteo Fantacchiotti after just five months in the role.

Reckitt Benckiser rose 1.4% on media reports of preliminary talks to sell its home care assets.

Novo Nordisk fell 2.2% as its diabetes treatment Ozempic “very likely” to be on the list of treatments whose price will be negotiated as part of Medicare coverage in 2027 in the United States, according to Bloomberg.

In terms of sectors, the new technologies sector (-0.73%) recorded one of the biggest falls in the Stoxx 600 due to profit taking.

(Written by Claude Chendjou, edited by Blandine Hénault)

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