View of the Palais Brongniart, former Paris Stock Exchange
by Claude Chendjou
PARIS (Reuters) – Major European stocks are expected to fall at the open on Thursday as monetary concerns are likely to prevail again ahead of meetings of the U.S. Federal Reserve (Fed) and European Central Bank (ECB).
Index futures suggest a decline of 0.34% for the CAC 40 in Paris, 0.43% for the Dax in Frankfurt, 0.05% for the FTSE 100 in London and 0.44% for the EuroStoxx 50.
The unexpected decisions of the central bank of Australia (RBA) and the Bank of Canada (BoC) to raise their respective key rates increased uncertainty about the choices that the Fed and the ECB could make on June 14 and 15, as well as only in the months to come.
For the moment, the money markets are forecasting a 25 basis point rate hike in the euro zone for next week and a status quo in the United States. The OECD, however, indicated on Wednesday that it anticipates an ECB final deposit rate of 4.25% against 3.25% currently and a peak in the rate of “fed funds” in the United States of 5.25%-5.5 % against 5%-5.25% currently, while investors still very recently estimated that the end of the rise in the cost of credit was near.
For Tapas Strickland, director of financial markets at NAB, the BoC and RBA decisions underscore that central banks are not done with the bullish cycle. “Next week’s U.S. consumer price (CPI) data will be key to whether the Fed moves forward in June or skips (this meeting) as widely anticipated,” he said. .
In today’s indicators, the second estimate of GDP (gross domestic product) in the euro zone for the first quarter is expected at 09:00 GMT.
In Japan, the economy grew faster than estimated in the first quarter, with GDP at 2.7% year on year, thanks in particular to an increase in business spending.
AT WALL STREET
The New York Stock Exchange ended in disarray on Wednesday, with investors taking their gains on big tech stocks ahead of monthly US inflation figures and the Fed’s monetary policy meeting.
The Dow Jones Industrial Average gained 0.27%, or 91.74 points, to 33,665.02 points.
The broader S&P-500 fell 16.33 points, or 0.38%, to 4,267.52 points.
The Nasdaq Composite fell for its part by 171.52 points (-1.29%) to 13,104.90 points.
Meta Platforms (-2.77%), Facebook’s parent company, was affected by a Wall Street Journal article claiming child pornography was posted on Instagram.
Netflix, which was up more than 4% at the open, ended almost even (+0.12%) after Wells Fargo raised its price target from $400 to $500, the highest level on Wall Street. , according to Refinitiv.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index ended down 0.8% at 31,658.28 points and the wider Topix fell 0.67% to 2,191.5 points.
The MSCI index grouping stocks from Asia and the Pacific (excluding Japan) lost 0.48%
In China, the SSE Composite of Shanghai, on the other hand, rose by 0.48% and the CSI 300 gained 0.73%.
EXCHANGES/RATES
The dollar was virtually unchanged (-0.01%) on Thursday against a basket of benchmark currencies as traders continue to assess the possibility of a Fed rate pause in June before a rally in July.
The Japanese currency is trading at 139.91 yen to the dollar, supported by revised Japanese GDP figures for the first quarter.
The euro is displayed at 1.0707 dollars (+0.09%).
The yield on ten-year US Treasuries climbs two basis points, to 3.805%, while its German equivalent of the same maturity takes about three basis points, to 2.471%
OIL
The oil market was virtually unchanged, with investors torn between concerns over global demand and Saudi Arabia’s decision to cut production further in July.
Brent nibbles 0.13% to 76.85 dollars a barrel and American light crude (West Texas Intermediate, WTI) 0.1% to 72.46 dollars.
(Written by Claude Chendjou, edited by Kate Entringer)