by CORENTIN CHAPRON
PARIS (Reuters) – Wall Street is expected to rise on Wednesday and European stock markets are progressing mid-session a few hours before the monetary policy decision of the Federal Reserve (Fed).
New York index futures suggest Wall Street opening in the green, with the Dow Jones up 0.24%, compared to 0.26% for the Standard & Poor’s 500 and 0.23% for the Nasdaq. .
In Paris, the CAC 40 rose 0.38% to 7,393.57 points around 11:17 GMT. The Dax in Frankfurt strengthened by 0.33%, while the FTSE in London increased by 0.21%.
The pan-European FTSEurofirst 300 index gained 0.24%, the EuroStoxx 50 gained 0.48% and the Stoxx 600 grew by 0.31%.
The Fed will announce its decision at 19:00 GMT.
“The market anticipates a drop in the rate of 25 bp to 4.5%, accompanied by a change of tone in communication,” summarize the Natixis strategists.
The speech by the president of the central bank, Jerome Powell, and the economic forecasts which will be published on this occasion will be scrutinized by the markets.
“The Fed appears to be considering a higher-than-expected terminal rate, while opting for a pause in January after this reduction. The coming months could see a more gradual and cautious approach to cuts, driven by a resilient economy, persistent inflation and the uncertainties linked to President Trump’s policies”, adds Natixis.
Monetary policy meetings of the Bank of Japan and the Bank of England on Thursday could add to the caution, with both central banks expected to keep rates at their current levels, according to money markets.
In the Eurozone, inflation in November was slightly lower than expected, while British inflation was in line with consensus in November.
VALUES TO FOLLOW AT WALL STREET
Mastercard said Tuesday its board approved a new stock repurchase program of up to $12 billion.
VALUES IN EUROPE
Honda and Nissan have opened negotiations to strengthen their ties, which causes Renault, Nissan’s majority shareholder, to jump by 5.8%.
UniCredit said on Wednesday it had increased its potential stake in Commerzbank to 28% thanks to new derivatives products. The two banks take 2.2% and 3.4% respectively.
Vusiongroup announced on Wednesday that it would digitize all of The Fresh Market’s physical stores and take 9.9%.
Grenergy advances 18.5% after the Spanish renewable energy company agreed to sell a portfolio of assets in Chile to ContourGlobal, a KKR company, for an enterprise value of $962 million.
RATE
US yields are rising slightly in anticipation of a more cautious Fed.
The yield on the ten-year Treasury increased by 2 bps to 4.4047% and that of the two-year security increased by 1 bps to 4.251%.
In Europe, the German ten-year rate increased by 1.4 bp to 2.247% while that of two-year bonds lost 2.1 bp to 2.033%.
CHANGES
Currencies vary shortly before expected Fed announcements.
The dollar fell by 0.04% against a basket of reference currencies, the euro rose by 0.08% to $1.0497 and the pound sterling strengthened by 0.05% to $1.2716.
OIL
Crude prices are increasing as data from the American Petroleum Institute reported, according to a source, a drop of 4.7 million barrels in crude stocks in the United States last week, reassuring about the state of demand in the world’s largest economy.
Brent rose by 0.44% to $73.51 per barrel and American light crude (West Texas Intermediate, WTI) rose by 0.56% to $70.47.
MORE MAJOR INDICATORS EXPECTED THIS DAY
(Written by Corentin Chappron, edited by Blandine Hénault)
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