PARIS (Reuters) – European stock markets ended lower on Wednesday as investors prepared for the Federal Reserve’s upcoming monetary policy decision.

In Paris, the CAC 40 fell 0.57% to 7,444.9 points, while the German Dax fell 0.03% and the British Footsie declined 0.7%.

The EuroStoxx 50 index ended the session down 0.46%, while the FTSEurofirst 300 lost 0.48% and the Stoxx 600 fell 0.49%. Markets are holding their breath, as uncertainty remains over the extent of the rate cut that the US central bank will announce at 18:00 GMT.

Deutsche Bank analysts note that uncertainty surrounding the meeting is at its highest level in 15 years: while a majority of economists expect a 25 basis point cut in September, according to a Reuters poll, money markets believe a 50 basis point cut is likely at 61%.

However, a Deutsche Bank survey conducted on Wednesday shows that market participants would be more surprised by a significant drop than by a 25 basis point cut.

The latest indicators have not made it possible to decide: activity is showing signs of slowing down, with Société Générale referring to the “end of American exceptionalism”.

Wages remain resilient, however, as does demand for employment, while US stock indices are once again reaching record highs.

The central bank’s new economic projections, also published at 18:00 GMT, will therefore be essential to understanding the Fed’s perception of American activity.

A WALL STREET

Wall Street fell mid-session, in a wait-and-see climate ahead of the Fed’s decision.

At the time of the European closing, trading on the New York Stock Exchange indicated a decline of 0.08% for the Dow Jones, against 0.1% for the Standard & Poor’s 500, and 0.11% for the Nasdaq Composite.

VALUES

Ubisoft rebounded 6.7% after BMO raised its recommendation on the stock, saying investors had “overreacted” to poor sales of its latest titles. Carmat fell 13.2% after announcing a new capital increase of €10.3 million.

Valneva gained 1.2% as the group submitted an application for expansion of its chikungunya vaccine to the European Medicines Agency and Health Canada.

Campari announced the unexpected departure of its CEO Matteo Fantacchiotti, and lost 7.2%.

The food and beverage sector fell -1%, while its competitors Pernod Ricard and Diageo lost 1.7% and 1.8% respectively.

Hexatronic ended down 10%, at the bottom of the Stoxx 600, after announcing the departure of its CEO Henrik Larsson Lyon.

Novo Nordisk declined 2.35% as Bloomberg reported that the company’s Ozempic drug was “very likely” to be included in the list of drugs to be priced under Medicare coverage in the United States in 2027.

RATE

Yields rebound amid uncertainty over Fed’s next decision.

The yield on the German ten-year bond rose 4 bp to 2.191%, while the two-year rate gained 3 bp to 2.266%.

At the time of the European closing, the yield on the ten-year Treasury rose 4.7 bp to 3.6887%, while the yield on the two-year note rose 6.9 bp to 3.6611%.

CHANGES

The pound strengthened against the dollar, with the interest rate gap between the two economies set to narrow as the Bank of England delivers its monetary policy decision on Thursday.

The dollar was unchanged against a basket of benchmark currencies, with the euro up 0.02% at $1.1115 and sterling up 0.32% at $1.3202.

OIL

Crude prices are wavering, with the latest figures from the American Petroleum Institute showing that US crude inventories rose by 1.96 million barrels last week.

Uncertainty over the Fed’s next decision is fueling volatility.

Brent is stable at $73.7 per barrel, while American light crude (West Texas Intermediate, WTI) is up 0.08% at $71.25.

(Written by Corentin Chappron, edited by Blandine Hénault)

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