Photo of the Euronext stock exchange in the La Defense business district in Paris, France
PARIS (Reuters) – European stock markets ended higher on Wednesday a few hours before the US Federal Reserve’s monetary policy decision.
In Paris, the CAC 40 gained 0.67% to 7,330.79 points, while the German Dax rose 0.75%. The British Footsie gained 0.93%.
The EuroStoxx 50 index ended the session with an increase of 0.78%, compared to 0.92% for the FTSEurofirst 300 and 0.91% for the Stoxx 600.
The markets are positioning themselves before the conclusion of the Federal Reserve meeting scheduled for 6 p.m. GMT, deemed risk-free by investors who estimate a pause in rate increases to be 99% likely.
The economic projections, which include the dot plot and will be published at the same time as the rate decision, should nevertheless suggest a further increase of 25 basis points by the end of the year.
In fact, uncertainty remains high in the medium term about the American economic trajectory and the evolution of inflation, supported by activity resistant to monetary tightening.
The diagnosis made by the central bank will be scrutinized by the markets, which will look for confirmation of a soft landing in activity.
“We expect the Fed to maintain the status quo in September due to the gradual decline in core inflation and the improving balance in the labor market,” write Rabobank strategists.
“The Fed should remain data-dependent, but emphasize its willingness to raise another 25 basis points before the end of the year if warranted.”
Unicredit rose 4.74% after statements from its general director, who declared that the tax on banking superprofits decided in August will only have a limited impact.
Just Eat Takeaway jumped 7.12% after a US judge ruled on Tuesday that food delivery groups could sue New York City over its law limiting the amount these groups can charge restaurants for food delivery. meal.
A WALL STREET
Wall Street hesitates at the closing time in Europe, the Nasdaq sensitive to the level of rates declining before the Fed.
At closing time in Europe, trading on the New York Stock Exchange indicated an increase of 0.56% for the Dow Jones, compared to 0.20% for the Standard & Poor’s 500 and a decrease of 0.28%. for the Nasdaq Composite.
US yields are declining in anticipation of the Fed’s monetary policy decision, while comments deemed accommodating from Gabriel Makhlouf, member of the board of governors of the European Central Bank, are pushing down yields in Europe.
The ten-year Treasury yield decreased by 4 bps to 4.3267%, while the two-year rate fell 4.7 bps to 5.0624%. The yield on the German ten-year rate fell 3.3 bp to 2.705%, while that of the two-year rate fell 2.5 bp to 3.26%.
The dollar falls ahead of the Fed’s decision, while the euro rises, supported by the narrowing of rate spreads on German and American two-year securities.
The dollar lost 0.33% against a basket of reference currencies, while the euro climbed 0.36% to $1.0715, with the pound sterling stable at $1.2386.
Crude is wavering in a volatile session, with data from the U.S. Energy Information Administration showing crude inventories hit their lowest level since July 2022.
Brent fell by 0.31% to $94.05 per barrel, with light American crude (West Texas Intermediate, WTI) rising by 0.25% to $91.43.
(Written by Corentin Chappron, edited by Nicolas Delame)