by Claude Chendjou

PARIS (Reuters) – The main European scholarships are expected on low variations on Wednesday in the absence of catalysts while investors keep an eye on the political situation in France and the continuation of the “Shutdown” in the United States, while gold, active refuge, steals from record in record.

According to the first indications available, the Parisian CAC 40 should gain 0.11% at the opening. The Dax in Frankfurt could advance by 0.13%, while the FTSE 100 in London should take 0.17%. The Eurostoxx 50 index is expected to fall on 0.04%. The Stoxx 600 could take 0.16%.

In France, the resigning Prime Minister Sébastien Lecornu seeks an outcome to the current political crisis while Edward Philippe, the former head of government of President Emmanuel Macron, claims an early presidential election after the budget vote. Another former Prime Minister, Elisabeth Borne, said she was open to the suspension of the pension reform that she had brought during her visit to Matignon and that the left wants to see repealed. According to the co-president of the Place Public Party, Raphaël Glucksmann, Sébastien Lecornu also opened the door to the suspension of the pension reform.

A sign of investors’ concern, the yield gap between German obligations at ten years, considered to be the safest in the euro zone, and those of France of the same deadline is around 85 base points, after having climbed to 87.96 points, at the highest since January 13.

At the same time, the euro still gave way on Wednesday after falling on Monday at 1.1649 dollars, its lowest level since September, while French actions have been lagging behind the rest of Europe since the start of the year.

Across the Atlantic, on the eighth day of the “Shutdown”, the Republicans and the Democrats give no sign that they are about to achieve an agreement to lift it in current budgetary paralysis.

In Japan, the probable arrival in the power of Sanae Takaichi, who advocates an expansionist economic policy, arouses questions and the fear of volatility on the foreign exchange market where the yen fell to a hollow of two months.

Despite the tremors in France, Japan and the United States, investors, however, keep a certain optimism against the backdrop of enthusiasm for artificial intelligence (AI) and hope for decreases in the American Federal Reserve (Fed). In this regard, the report of the latest Fed monetary policy meeting will be particularly scrutinized at 6:00 p.m. GMT.

A Wall Street

The New York Stock Exchange ended up on Tuesday the day after new closing records of the S&P 500 and the NASDAQ while investors, deprived of economic data because of the “Shutdown”, scrutinize the secondary indicators and the declarations of the leaders of the FED to find indices on economic weakness and monetary policy.

The Dow Jones index sold 0.20%, or 91.99 points, to 46,602.98 points. The larger Standard & Poor’s 500 lost 25.69 points, or 0.38% to 6,714.59 points. The Nasdaq Composite fell on its side of 153.30 points, or 0.67% to 22,788,363 points.

The three clues finished down while a report published Tuesday by the New York Fed shows that the Americans were more worried about the future of the job market in September, while revising their forecasts concerning the evolution of short -term inflation.

In Asia

On the Tokyo Stock Exchange, the Nikkei index reflected on Wednesday from 0.45% to 47,734.99 points in a hesitant session. The wider topix took 0.24% to 3,235.66 points.

The optimism linked to the expected recovery measures of the future Japanese Prime Minister Sanae Takaichi compensated for profits after the record levels registered by the clues.

The MSCI index bringing together the values ​​of Asia and the Pacific (excluding Japan) loses 0.8%.

In Hong Kong, the Hang Seng index is backing up for a third consecutive session, by 0.73%, weighed down by technological values, after reaching a four -year summit on October 2.

Markets in mainland China remain closed this Wednesday for an additional holiday.

The values ​​to follow in Europe:

Changes

The dollar still featured, by 0.35%, faced with a basket of reference currencies, while budgetary paralysis in the United States continues, which weighs on confidence and stimulates demand for refuge assets.

The dollar index reached its highest level on Wednesday in more than two months.

The euro fell by 0.41%, to 1.1607 dollars with the political crisis in France, while industrial production in Germany fell more than expected in August compared to the previous month, according to official data published this Wednesday.

The pound sterling is exchanged at 1.3385 dollars, withdrawn by 0.31%.

The Japanese yen oscillates near its lowest levels of eight months, at 152.33 for an American dollar, investors monitoring the budgetary measures that the future Prime Minister Sanae Takaichi will take.

The New Zealand dollar abandoned 1% to 0.5739, a hollow of six months, after the drop in the surprise of the 50-points basic rate by the New Zealand reserve bank.

RATE

The yield of American treasury bills at ten years is stable, at 4.121%, after a decline of 3.1 points the day before. The two years is also practically unchanged, at 3.565%.

The yield of the German Bund in the same deadline is displayed at 2.706%, practically not varying, after having already finished almost unchanged on Tuesday. The two years is 2.00%.

The yield gap between the Bund and the French OAT at ten years remains above the 85 base points, up approximately five points since the fence on Friday.

OIL

The oil market is increasing on Wednesday as the fear of an excess offer is reduced after OPEC +’s decision to limit the increase in production.

Brent increased by 0.76% to 65.95 dollars per barrel and light American crude (West Texas Intermediate, WTI) rises from 0.84% ​​to 62.25 dollars.

Metals

Gold exceeded the $ 4,000’s mark on $ 4.021.22, to reach a record on Wednesday, taking advantage of the appetite of investors for assets deemed safe in the face of increased economic and geopolitical uncertainty and the expectations of new interest rate reductions by the Fed.

(Written by Claude Chendjou, edited by Blandine Hénault)

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