by Diana Mandia

PARIS (Reuters) – The main European stock markets are expected to be on a hesitant note at the opening on Thursday, after a record session the day before for the Stoxx, while investors digest the political announcements in France, where President Emmanuel Macron has promised to appoint a new Prime Minister within 48 hours.

Markets will also remain attentive to the situation in the Middle East after Israel and Hamas approved the first phase of Donald Trump’s plan to end the war in the Gaza Strip.

Index futures suggest an opening up 0.16% for the Parisian CAC 40, 0.13% for the Dax in Frankfurt. The FTSE in London, on the other hand, should open with a decline of 0.27%, while the Stoxx 600 is expected to decline by 0.12%.

The session, although rather poor in new macroeconomic data, promises to be rich in important political events likely to influence investor morale.

In France, where the unexpected resignation of Prime Minister Sébastien Lecornu shook the markets at the start of the week, a new head of executive should be appointed within 48 hours by Emmanuel Macron, the Elysée announced on Wednesday evening.

After two days of consultations with political parties, the short-lived tenant of Matignon believes in particular that a majority of deputies are against the dissolution of the National Assembly and that a path is possible for the adoption of a budget by December 31.

Investors will also be watching the implications of overnight announcements regarding the Middle East, after Israel and Hamas gave the green light to the first phase of the White House plan to end the war in Gaza, which has raged in the Palestinian enclave for two years.

Trade is also likely to weigh, as China on Thursday strengthened its controls on exports of rare earths, widening restrictions on processing technologies and banning unauthorized cooperation with foreign countries and notably targeting shipments in the fields of defense and semiconductors.

In the euro zone, investors will know at 11:30 GMT the minutes of the last meeting of the European Central Bank (ECB), during which the institute, as expected, left its key rates unchanged, after a similar decision in July.

All this in a context marked by enthusiasm around artificial intelligence (AI), particularly in the United States, where the latest “minutes” from the Federal Reserve (Fed), published on Wednesday, did not call into question the prospects of lowering rates at the next meetings of the central bank.

VALUES TO FOLLOW: [L5N3VP17Z]

A WALL STREET

The S&P 500 and the Nasdaq Composite closed at records on Wednesday on the New York Stock Exchange, still driven by hopes placed in artificial intelligence, while waiting to see more clearly on the economic situation.

The S&P 500 gained 0.58% and the Nasdaq Composite gained 1.12%. The Dow Jones finished stable at 46,601.78 points.

IN ASIA

In Japan, the Nikkei of the Tokyo Stock Exchange gained 1.77%, thanks in particular to the strong increase in the title SoftBank (+11.43%), which announced on Wednesday that it had bought the robotics division of the Swiss group ABB, thus pursuing a strategy aimed at merging robotics and artificial intelligence.

In China, stock markets reached their highest level in more than ten years on Thursday, supported by stocks linked to semiconductors, gold and artificial intelligence, after a week of vacation.

The Shanghai Stock Exchange Composite Index rose 1.08% and the CSI 300 of large caps rose 1.31%.

The Hong Kong Stock Exchange gained 0.08%.

RATE

The yield on ten-year Treasuries fell slightly to stand at 4.1287%.

In Europe, the bond market opened on a stable note.

The ten-year German Bund yield climbed 0.7 basis points to 2.6842%. The two-year takes 0.3 basis points to 1.9919%.

In France, the yield on the ten-year OAT remains almost unchanged at 3.5156%.

CHANGES

The euro fell slightly after hitting a six-week low in recent hours, weighed down by the political crisis in France and data published on Wednesday showing that German industrial production suffered its biggest monthly decline in more than three years in August.

Other data released on Thursday showed German exports fell 0.5% in August from the previous month, an unexpected decline.

The European currency lost 0.03% to 1.1622 dollars, while the greenback lost 0.02% against a basket of reference currencies.

OIL

Oil prices stabilized after a decline earlier in the session, as investors considered the crude market implications of the announced deal between Israel and Hamas on the first phase of a US plan to end the war in Gaza.

Brent gained 0.05% to $66.28 per barrel and American light crude (West Texas Intermediate, WTI) lost 0.02% to $62.54.

(Written by Diana Mandia, edited by Blandine Hénault)

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