by Diana Mandia

PARIS (Reuters) – The main European scholarships are expected up on Wednesday at the opening, with their eyes riveted on the American Federal Reserve (Fed), which must later announce its first drop in rates of 2025 and give indications on possible additional reductions.

According to the first indications available, the Parisian CAC 40 could gain 0.16% at the opening.

The term contracts report an increase of 0.24% for the Dax in Frankfurt and 0.09% for the FTSE in London. The Stoxx 600 should start the session on a gain of 0.18%.

The operators are almost certain that the American central bank will reduce its key rate for 25 basic points on Wednesday to bring it back in a range between 4% and 4.25%, and even plan that it will go further and soften its monetary policy by almost 150 base points by the end of next year.

All eyes will therefore be turned to the comments of the president of the Fed, Jerome Powell, as well as to the “dot plot” of the economic projections of the central bank, the investors being looking for an accommodating position on the part of the institution, which has maintained the costs of borrowing unchanged since January due to the commercial uncertainty.

A series of little encouraging data on the job market – that neither the figures for still high inflation managed to relegate to the background – however, has reinforced betting since summer over a drop in rates, propeling shares and gold at record levels, to the detriment of American treasury and dollar, which has stagnated at its lowest level for four years against the euro.

“The markets actually challenge Fed to go beyond its promises in terms of accommodating policy,” said Dilin Wu, strategist at Peppperstone.

In addition to the Fed, the Bank of Canada should also reduce its rates on Wednesday to deal with the weakening of the labor market and trade tensions.

In Europe, where the markets have slowed down their bets over a next drop in European Central Bank (ECB) after eight borrowing costs since June 2024 and two breaks in July and September, investors will be attentive to British inflation figures on Wednesday at 6:00 am GMT and the euro zone at 9:00 am GMT.

The values ​​to follow: [L5N3V315P]

A Wall Street

The New York Stock Exchange ended up on Tuesday while caution settled on the markets awaiting a decision of the American Federal Reserve (Fed) on a drop in rates.

The Dow Jones index sold 0.27%, Standard & Poor’s 500, wider, lost 0.13%and the Nasdaq Composite fell on its side of 0.07%.

In Asia

In Tokyo, the Nikkei index fell 0.12% to 44,846.40 points during a volatile session before the Fed decision.

Japanese exports also fell for the fourth consecutive month in August, according to data published on Wednesday by the government, the customs duties imposed by the United States which notably impacted the automotive and manufacturing sectors.

In China, the composite index of the Shanghai Stock Exchange increased by 0.31% and the CSI 300 of large capitalizations advances by 0.45%.

The Hong Kong Stock Exchange takes 1.41%, supported by technological values, while trust in China’s capacities in artificial intelligence and signs of progress in an agreement on Tiktok with the United States stimulate appetite for risk assets.

RATE

The yield of ten -year -old Treasuries fell slightly to 4.0240%, as is that of the two -year obligation, which stands at 3.5072%, before the Fed’s decision.

Changes

The US dollar has stagnated on Wednesday near its lowest level for four years against the euro and its lowest level for a month against the Yen.

The greenback loses 0.07% against a basket of reference currencies, while the euro yields 0.07% to 1.1858 dollars.

The pound sterling loses 0.01% against the dollar and advances 0.15% against the euro before the publication of data on British inflation and the monetary policy decision of the Bank of England, scheduled for Thursday.

OIL

Oil prices retreat slightly on Wednesday after increasing more than 1% the day before due to fears about the offer linked to Ukrainian drone attacks in the Russian oil sector.

Brent abandoned 0.16% to 68.36 dollars per barrel and American brut (West Texas Intermediate, WTI) lost 0.12% to 64.44 dollars.

The Russian operator of Transneft oil pipelines warned petroleum producers that they may be forced to reduce their production as a result of Ukrainian drone attacks against export ports and refineries, three sources in the sector said on Tuesday.

Main economic indicators at the September 17 agenda:

Pays GMT indicator previous consensus period

GB 06:00 AM PRICE index in August

consumption

– Over one month 0.3% 0.1%

– Over one year 3.8% 3.8%

EZ 09:00 AM PRICE INDICE IN AUGUST

Consumption (final)

– Over one month 0.2% 0.0%*

– over one year 2.1% 2.1%*

(Written by Diana Mandia, edited by Augustin Turpin)

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