PARIS (Reuters) – The main European stock markets are expected to be hesitant at the opening on Wednesday, with investors positioning themselves cautiously before the Federal Reserve’s (Fed) decision on rates, announced in the evening.

Futures contracts suggest a stable opening for the Parisian CAC 40, compared to an increase of 0.06% for the FTSE in London, a decline of 0.09% for the Dax in Frankfurt, and an increase of 0.06% for the EuroStoxx 50.

The Fed will announce its rate decision at 19:00 GMT.

“The Fed has always followed market prices. And when it does not like these prices, the central bank has always managed to make it known in advance,” recall ING strategists.

Money markets are expecting a cut of 25 basis points.

Investors will also be attentive to the speech from the president of the institution, Jerome Powell, as well as the updated forecasts from the central bank.

“The key element for the markets is whether the Fed will pause its monetary easing cycle at its January meeting,” summarizes ING.

Uncertainty remains high in the United States: inflation is proving resilient and labor markets remain solid, while the measures that the new president-elect Donald Trump will take are still to be clarified.

In the euro zone, final inflation for November is expected at 10:00 GMT.

The monetary policy decisions of the Bank of Japan and the Bank of England on Thursday will help to liven up trade this week.

VALUES TO FOLLOW:

A WALL STREET

The New York Stock Exchange ended down on Tuesday, with the Dow Jones recording a ninth consecutive session in the red, as investors favored caution ahead of the conclusion of the Fed’s monetary policy meeting.

The Dow Jones index lost 0.61%, or 267.58 points, to 43,449.90 points.

The broader S&P-500 lost 23.47 points, or 0.39%, to 6,050.61 points.

The Nasdaq Composite fell 64.83 points (0.32%) to 20,109.06 points.

Tesla gained 3.6% after Mizuho significantly raised its price target for the electric vehicle manufacturer.

IN ASIA

The Tokyo Stock Exchange fell under pressure from technology stocks, although the auto sector rose after reports that Honda and Nissan opened negotiations to strengthen their ties. The Nikkei index lost 0.72% to 39,081.71 points. The broader Topix lost 0.31% to 2,719.87 points.

Nissan Motor took 23.7%.

Chinese indexes are rising, with China’s public deficit expected to hit a record next year, while Beijing has recommended state-owned companies improve market sentiment. The Hong Kong Hang Seng index increased by 0.8%, the Shanghai SSE Composite by 0.63%, the CSI 300 by 0.51%.

RATE

US yields move shortly before the Fed’s decision.

The yield on the ten-year Treasury is stable at 4.3849%, while the yield on the two-year security remains at 4.2362%.

CHANGES

Foreign exchange markets are calm ahead of the Fed meeting.

In Asia, the yen advanced 0.01% to 153.46 yen per dollar, the Australian dollar lost 0.32% to 0.6316 dollars.

The dollar fell 0.07% against a basket of reference currencies, the euro rose 0.16% to $1.0506, and the pound sterling lost 0.06% to $1.2703.

OIL

The barrel is up slightly before the Fed’s next decision.

Brent rose by 0.08% to $73.25 per barrel, American light crude (West Texas Intermediate, WTI) rose by 0.13% to $70.17.

MAIN ECONOMIC INDICATORS ON THE AGENDA FOR DECEMBER 18:

COUNTRY GMT INDICATOR PERIOD PREVIOUS CONSENSUS

GB 07:00 Consumer prices November +0.1% +0.6%

– over one year +2.6% +2.3%

EZ 10:00 Inflation (final) November -0.3% +0.3%

– over one year +2.3% +2.3%

(Written by Corentin Chappron, edited by Jean-Stéphane Brosse)

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