PARIS (Reuters) – The main European stock markets are expected to show no real trend on Wednesday before a speech by the president of the Federal Reserve (Fed) in the United States and the vote on the motions of censure against the Michel Barnier government in France in the evening.

Futures contracts suggest an opening down 0.31% for the Parisian CAC 40, compared to a decline of 0.38% for the FTSE in London, a decline of 0.05% for the Dax in Frankfurt, and a decline by 0.14% for the EuroStoxx 50.

Eyes are turned towards the United States as uncertainties continue to grow on the political level and plunge with the vote of motions of censure against the government of Michel Barnier in France in the evening and the situation in South Korea.

Fed Chairman Jerome Powell is scheduled to speak during the session at a New York Times conference in what is expected to be his last public address before the central bank’s monetary policy decision on Dec. 18 .

After good figures on job offers in October and statements from members of the Fed expressing confidence on the 2% inflation target on Tuesday, investors will today be scrutinizing other indicators expected during the session across the Atlantic while awaiting the monthly unemployment figures which are due to be published on Friday.

Markets now estimate a 72% probability of a 25 basis point rate cut in two weeks and the majority are betting on a total reduction of 80 basis points by the end of next year.

In Europe, the political situation in France continues to worry with the vote on the motions of censure filed by the oppositions against the government of Michel Barnier expected in the evening. However, analysts are not giving in to panic for the moment.

In Asia, South Korean authorities promised to inject liquidity to support markets after the president declared martial law on Tuesday, renouncing it a few hours later.

A WALL STREET

The New York Stock Exchange ended in mixed order on Tuesday as markets await more data on employment figures.

The Dow Jones index lost 0.17%, or 76.47 points, to 44,705.53 points.

The broader Standard & Poor’s 500 gained 2.73 points, or 0.05% to 6,049.88 points.

The Nasdaq Composite advanced 76.96 points, or 0.40%, to 19,480.91 points.

Tesla fell 1.6% after sales of the U.S. automaker’s China-produced electric vehicles fell 4.3% in November year-on-year.

IN ASIA

Tokyo closed relatively stable after profit-taking following two rising sessions.

The Tokyo Stock Exchange ended up 0.07%.

In China, weak growth in the services sector and fears surrounding a trade war with the United States are weighing on investor sentiment who must also digest the situation in South Korea.

The Hong Kong Hang Seng index declined by 0.01%, the Shanghai SSE Composite fell by 0.5%, the CSI 300 fell by 0.63%.

RATE

Investors are waiting for more data this week to position themselves.

The ten-year Treasury yield rose 1.1 basis points (bps) to 4.2323%, while the two-year yield fell 0.2 bps to 4.169%.

The German ten-year yield fell by 0.3 bp to 2.053%, that of the two-year rate rose by 0.6 bp to 1.952%.

CHANGES

The Australian dollar fell to its lowest level in four months on Wednesday after weaker than expected economic growth figures, fueling expectations of a rate cut. The situation in South Korea is also weighing on Asian currencies.

In Asia, the yen declined by 0.3% to 150.04 yen per dollar, the Australian dollar lost 0.66% to 0.644 dollars.

The dollar fell by 0.09% against a basket of reference currencies, the euro rose by 0.1% to $1.0519, and the pound sterling strengthened by 0.17% to $1.2692.

OIL

The barrel is moving higher on Wednesday as market players assess geopolitical tensions and OPEC+ ministers are due to meet on Thursday December 5 and could extend supply cuts in the face of weaker demand.

Brent rose by 0.31% to $73.85 per barrel, American light crude (West Texas Intermediate, WTI) rose by 0.26% to $70.12.

(Written by Bertrand De Meyer, edited by Kate Entringer)

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