by Diana Mandia
PARIS (Reuters) – The main European scholarships are expected on low variations Wednesday at the opening, investors adopting a prudent approach before the decision of the Federal Reserve (Fed) on borrowing costs later in the day, while keeping an eye on the latest developments on the commercial front.
The term contracts on indices suggest an opening down 0.19% for the Parisian CAC 40, an increase of 0.11% for the Dax in Frankfurt and a decline of 0.1% for the FTSE in London.
The Stoxx 600 is expected on a drop of 0.19%.
European equity markets should start the session on low variations before the monetary policy decision across the Atlantic, scheduled for 6:00 p.m. GMT on Wednesday, and especially the comments of the president of the American central bank Jerome Powell, in a context always marked by the impact of customs duties on inflation and growth of the world’s first world.
According to all bets, the American central bank will be patient, wanting to see the repercussions of Donald Trump’s commercial policy before adjusting its monetary policy, and will leave its interest rates unchanged on Wednesday, while a drop of at least 25 basic points in July is anticipated by almost 80% of the markets, according to LSEG data.
Investors, impatient to see the commercial file advance, should also salute the announcement of a meeting between Chinese Deputy Prime Minister He Lifeng and the US Secretary of State Scott besides in Switzerland in the coming days as an opportunity to soften the severe surcharges that the two powers have imposed each other since the beginning of April.
“This suggests that there may be a will and an enthusiasm on the part of the two parties for a high-level meeting, so it can only be positive, I think,” said Ray Attrill, analyst at National Australia Bank.
The Chinese authorities also announced on Wednesday a series of recovery measures, including interest rate reductions and a significant injection of liquidity, while Beijing redoubles efforts to alleviate the damage caused by the trade war with the United States.
In Europe, investors must also digest a new wave of business results, including those of the manufacturer of Novo Nordisk Obesity Medicines and the BMW car manufacturer, which are likely to weigh on the trend.
In Germany, orders for industry increased more than expected in March, according to data from the Federal Statistics Office.
The values ​​to follow: [L8N3RE2K3]
A Wall Street
The New York Stock Exchange ended up on Tuesday, against the backdrop of customs duties.
The Dow Jones index sold 0.95%, the wider S & P-500 lost 0.77 and the Nasdaq Composite fell on its side of 0.87%.
In Asia
In Tokyo, the Nikkei experienced a volatile session on Wednesday to finish on a drop of 0.14%, the pharmaceutical sector weighing on the trend after US President Donald Trump said that he would reveal customs duties in this industry in the next two weeks.
The Chinese markets are in green Wednesday, even if they reduce their gains compared to the summits affected on Wednesday, the initial enthusiasm aroused by the monetary relaxation measures of Beijing and the next trade negotiations between the United States and China having given way to profits.
The composite index of the Shanghai Stock Exchange increased by 0.41% and the CSI 300 of large capitalizations advances by 0.32%.
The Hong Kong Stock Exchange wins 0.31%.
Rate / change
The bond market is rather calm pending the Fed decision.
In the euro zone, the yield of the German Bund at ten years has a gain of 0.8 basic point at 2,5,400%, while that of its two -year counterpart takes 1.1 basic points at 1.7650%.
In the United States, yields are also stable; That of the Treasuries at ten years is 4.3218% and that of the obligation at two years at 3.8075%.
On the foreign exchange market, the dollar stabilizes on Wednesday before the Fed decision and after losing ground in the face of certain Asian currencies in the last sessions.
The greenback thus earns 0.13% against a basket of reference currencies, while the euro fell 0.02% to 1.1366 dollars.
The South Korean Won has reached its highest level for six months earlier Wednesday, but then lost ground, while the Chinese yuan weakens with the announcement of the drop in interest rates in China.
OIL
Oil prices are increasing on Wednesday, while maintaining their lowest levels slightly for four years, investors focus on trade negotiations between the United States and China and the signs of a drop in American production.
Brent took 1.13% at 62.85 dollars per barrel and American light crude (West Texas Intermediate, WTI) gained 1.29% to 59.85 dollars.
Main economic indicators at the May 7 agenda:
Pays GMT indicator previous consensus period
Fr 06:45 am commercial balance March – -7.87 billion
Fr 06h45 employee employment T1 – -0.3%
EZ 9:00 am retail sales March
– Over one month 0.0% 0.3%
– over one year 1.6% 2.3%
(Written by Diana Mandia, edited by Augustin Turpin)
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