Europe’s stock market down slightly

by Diana Mandia

PARIS (Reuters) – The main European stock markets are expected to fall slightly at the opening on Wednesday, in a context of wait-and-see before the publication of inflation figures in several countries in the euro zone and in the United States, remaining however close to the record levels recorded the day before.

Futures contracts report a decline of 0.07% for the CAC 40, 0.12% for the Dax in Frankfurt, 0.16% for the FTSE in London and 0.14% for the Stoxx 600.

The European stock markets have been moving slightly in recent days: the week is shortened due to the long Easter weekend and most markets will remain closed on Friday.

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In this context of wait-and-see, the market is struggling to find its momentum, even if the gains in the technology sector in the wake of the American chip sector and the easing of the bond market allowed European indices to reach records on Tuesday.

All the attention of investors is focused on the publication on Friday of the PCE price index in the United States, the measure of inflation preferred by the Federal Reserve (Fed), with operators seeking to obtain indications on the projects of the central bank’s monetary policy, while most of them expect a rate cut in June.

Fed Chairman Jerome Powell will also speak on Friday.

In Europe, markets will take note this Wednesday of data on consumer confidence in France, inflation in Spain for the month of March and the euro zone economic sentiment index.

The Swedish central bank is also expected to announce its monetary policy decision at 9:30 a.m. According to a Reuters poll of analysts, the Riksbank is expected to keep rates at 4%, although it may signal a rate cut in coming months.

A WALL STREET

The New York Stock Exchange ended lower on Tuesday, giving up modest gains recorded at the start of the session, as investors await the release of the PCE price index on Friday.

The Dow Jones index lost 0.08%, the broader S&P-500 lost 0.28% and the Nasdaq Composite fell 0.42%.

IN ASIA

In Tokyo, the Nikkei index gained 0.90% on Wednesday, as the weakness of the yen, which fell to its lowest level in 34 years against the dollar, stimulated exporters.

Japanese Finance Minister Shunichi Suzuki also issued a strong warning on Wednesday against the weakness of the national currency, declaring that the authorities could take “decisive measures”, an expression already used in the fall of 2022, when Japan last intervened in the market to curb its currency weakness.

In China, the stock markets fell on Wednesday and the yuan weakened under pressure from a stronger dollar.

The Shanghai Stock Exchange Composite Index fell 1.3% and the large-cap CSI 300 fell 1.2%.

The Hong Kong Stock Exchange lost 1.55%.

Data released on Wednesday also showed that profits of Chinese industrial companies jumped 10.2% in the first two months of the year, although overall gains remained tempered by the fragility of the real estate market.

RATES/EXCHANGES

The American bond markets, which had increased slightly on Tuesday after a rebound in orders for durable goods in February, were stable on Wednesday: the ten-year Treasury yield stood at 4.2297%, and the two-year yield at 4.5972%.

The German ten-year yield lost around 2 basis points to 2.33%, like that of the two-year rate, which moved to 2.8331%.

On the foreign exchange market, the dollar gained 0.11% against a basket of reference currencies.

The euro lost 0.04% to 1.0826 dollars.

The yen fell by 0.09 to 151.69 per dollar.

OIL

Oil prices retreated Wednesday after a report on rising crude inventories in the United States, the world’s largest oil consumer, and after signs that OPEC+ is unlikely to change its production policy during a meeting which will take place next week.

The barrel of Brent fell by 1.01% and that of American light crude oil (WTI) lost 0.96%.

(Writing by Diana Mandiá, editing by Zhifan Liu)