by Diana Mandia

(Reuters) – European scholarships finished decreasing on Tuesday, trained by the decline in banks, monetary policy giving the tone on the eve of what should be the first drop in the rates of the Federal Reserve (Fed) since last December.

In Paris, the CAC 40 finished down 1% to 7,818.22 points after six consecutive sessions in the green. In Frankfurt, the Dax fell 1.79% and in London, the FTSE 100 lost 0.88%.

The Eurostoxx 50 index ended up on a drop 1.26%, the FTSEUROFRST 300 lost 1.15%and the Stoxx 600 abandoned 1.15%.

At the end of a two-day meeting started on Tuesday, the Fed should announce a drop in 25 basis points of borrowing costs, which remained unchanged in a range of 4.25% -4.50% since the reduction announced in December 2024.

Under -term contracts also anticipate more than 127 points basis of rate drops by the Fed until July 2026, which means that the bar could be placed high so that the president of the institution, Jerome Powell, maintains the optimism of investors in his forecasts and comments on possible decisions to come.

In Europe, analysts have, on the other hand, reduced their bets to a next drop in European central bank rates (ECB) after eight loan costs since June 2024 and two breaks in July and September, which explains Tuesday the decline in the bank segment (-1.9%) and insurers (-2.1%), two sectors sensitive to monetary policy forecasts.

VALUES

L’Oréal fell 2.9% after a change in recommendation from Jefferies, which went from “to” underperform “, believing that the French cosmetics giant will face a normalization of the beauty market and prospects for” less impressive “margins.

Kering took 3.1%, helped by AlphaValue, which noted its recommendation on the value by citing the measures expected by the new Managing Director Luca de Meo to straighten the luxury giant.

BNP Paribas finished slightly in the red (-1.4%) after confirmation of its financial objectives for this year. Société Générale and Crédit Agricole have lost 3.5% and 1.7% in a losses for the banking sector of the Stoxx.

Vusiongroup, formerly Ses-Imagotag,, however flew by 13.6% thanks to the recovery on Monday of its prospects for the 2025 exercise.

Elsewhere in Europe, recruitment companies suffered on Tuesday after Stthree announced an annual profit forecast before taxes much lower than expectations, plunging the share of 25.2%.

A Wall Street

The New York Stock Exchange turned down after an opening in the green, investors opting by caution before the Fed’s decision.

At the time of the fence in Europe, the Dow Jones gave way 0.42%, the Standard & Poor’s 500 lost 0.22%and the Nasdaq Composite abandons 0.15%.

The indicators of the day

On the macroeconomic front, the growth of the British average weekly salary, excluding bonuses, slowly slowed down to 4.8% in the three months preceding July compared to the previous year, data known two days before the decision on the rates of the Bank of England (BOE), which should leave them unchanged due to the fears of persistent inflation.

In Germany, the monthly survey published Tuesday by the Zew Institute of Economic Studies has shown that investor morale has improved faster than expected since the beginning of September.

In the United States, retail sales has increased more than expected in August from one month to the next, but the dynamics could slow down due to the weakness of the American labor market and the price increase due to customs duties on imports.

The industrial production of the euro zone has also increased less than expected over a month in July, while it has progressed intagant in the United States, show official statistics published on Tuesday.

Changes

The anticipations of a drop in FED rates are pressure on the dollar which has reached its lowest level on Tuesday for four years against the euro and lost 0.48% against a basket of reference currencies at the time of the fence of scholarships in Europe.

The euro earns 0.64% to 1.1835 dollars.

RATE

The session was rather calm for the yields of the Euro zone obligations.

The yield of the German Bund at ten years finished almost unchanged at 2.6934%, while that of the two -year obligation lost 1.2 base points to 2.0047%.

In the United States, yields vary shortly before the Fed decision.

The yield of Treasuries at ten years grabbed 0.7 base points to 4.0413%. The two -year -old yields for its part 0.9 basic point at 3.5262%.

OIL

Oil prices increased more than 1%, pulled by fears of supply disturbance due to Ukrainian drone attacks against Russian ports and refineries.

Brent took 1.3% at 68.32 dollars per barrel and American light crude (West Texas Intermediate, WTI) advances from 1.69% to 64.37 dollars.

To be continued on September 17:

(Some data may accuse a slight offset)

(Written by Diana Mandiá, edited by Blandine Hénault)

Copyright © 2025 Thomson Reuters