by Claude Chendjou

PARIS (Reuters) – Wall Street is expected to fall on Wednesday and European stock markets are also in the red at mid-session, with investors being cautious before the publication of US inflation figures. New York index futures signal Wall Street opening down 0.31% for the Dow Jones, 0.25% for the Standard & Poor’s 500 and 0.27% for the Nasdaq. In Paris, the CAC 40 lost 0.18% to 7,214.22 points around 12:20 GMT after a decline of 2.69% on Tuesday. In Frankfurt, the Dax fell by 0.08% and in London, the FTSE lost 0.14%.

The pan-European FTSEurofirst 300 index lost 0.30%, the EuroStoxx 50 of the euro zone 0.14% and the Stoxx 600 0.36%.

The Consumer Price Index (CPI) in the United States for the month of October will be published at 1:30 p.m. GMT and should offer investors signs on the trajectory of key rates from the American Federal Reserve (Fed). The Reuters consensus forecasts monthly stability for both the CPI and the “core” CPI, at 0.2% and 0.3% respectively.

The market expects a 66% probability of a further reduction in borrowing costs of 25 basis points at the December Fed meeting, according to the CME Group’s FedWatch barometer.

Despite the expected drop at the opening of Wall Street, American markets are close to their record level, driven by Donald Trump’s promises of deregulation of the economy and lower taxes. The S&P 500 has gained around 3.5% since the close on November 5 and is at this stage heading towards a gain of more than 25% since the start of the year.

A Bank of America (BofA) survey shows that investors around the world have increased their exposure to US stocks since Donald Trump’s victory in the US presidential election, now anticipating higher growth as well as higher inflation.

In Europe, however, Donald Trump’s political and economic program is frightening as the billionaire continues his consultations for appointments in his future administration.

“Trump’s recent picks for key posts are hawks who are likely to continue the America First policy. This raises concerns about the impact on growth in Europe and China,” the analysts write by Jefferies in a note.

Donald Trump’s choices, in fact, portend a trade war with China, which would affect European export values, such as luxury, whose index on the Stoxx (-0.20%) fell again on Wednesday after having fallen the standby of 3.69%.

The new technologies (-1.07%) and automobile (-1.18%) sectors also weigh, while the energy sector (+0.68%) offers a little support. VALUES TO FOLLOW AT WALL STREET

Spirit Airlines falls 62.4% in pre-market trading. The airline is preparing to file for bankruptcy protection after merger negotiations with Frontier Airlines failed, the Wall Street Journal reported Tuesday evening.

Tesla is up 2.6% after a drop of 6.2% on Tuesday as Donald Trump announced that the automaker’s boss, Elon Musk, will head the Department of Government Efficiency in the United States.

VALUES IN EUROPE

Air Liquide takes 1.21%, Jefferies having raised its recommendation from “underperformance” to “buy”. Siemens Energy soars by 13.2% thanks to the increase in its medium-term financial objectives.

RWE jumped 7.37%, the German group having announced a share buyback program for a maximum amount of 1.5 billion euros.

Just Eat Takeaway climbs 15.73% after announcing an agreement to sell its American subsidiary Grubhub to Wonder for $650 million.

RATES Short-term bond yields in the zone rose on Wednesday after three days of decline: the German two-year rose almost four basis points, to 2.169%. The ten-year advances by 3.5 points, to 2.386%.

In the United States, before the publication of inflation figures, the yield on ten-year Treasury bonds lost 1.7 basis points, to 4.4157%, and the two-year yield was stable, at 4.3488%. .

EXCHANGES The US dollar hit a new six-and-a-half month high against other major currencies on Wednesday and the Japanese yen fell to its lowest level since July, due to the “Trump trade”.

The greenback lost 0.08% against a basket of six currencies, while the euro gained 0.07% to 1.0630 dollars.

The yen is trading at 154.89 per dollar after crossing the 155 per dollar mark, the Japanese currency’s weakest level since July 30.

OIL

Oil prices rise but remain close to their lowest level in two weeks on Wednesday, the day after a downward revision of OPEC’s forecasts concerning global demand for crude in 2024 and 2025 and due to concerns over the demand in China.

Brent rose 0.40% to $72.16 per barrel and American light crude (West Texas Intermediate, WTI) rose 0.35% to $68.37.

MAIN ECONOMIC INDICATORS ON THE AGENDA FOR NOVEMBER 13:

COUNTRY GMT INDICATOR PERIOD PREVIOUS CONSENSUS

USA 1:30 p.m. October price index +0.2% +0.2%

consumption (CPI)

– over one year +2.6% +2.4%

USA 1:30 p.m. October price index +0.3% +0.3%

underlying consumption

(CPI)

– over one year +3.3% +3.3%

(Writing by Claude Chendjou, edited by Kate Entringer)

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