Photo of traders in Frankfurt
by Blandine Henault
PARIS (Reuters) – The main European stock markets are expected to rise on Thursday at the opening, in the wake of Wall Street and Asia as optimism prevails on an upcoming agreement on the debt ceiling in the United States .
Futures contracts signal an increase of 0.43% for the CAC 40 in Paris, 0.4% for the Dax in Frankfurt, 0.49% for the FTSE in London and 0.56% for the EuroStoxx50.
On Wednesday evening, Wall Street ended sharply higher after statements by Democratic President Joe Biden and Republican House of Representatives “speaker” Kevin McCarthy, who reiterated their determination to find an agreement on the American debt ceiling and avoid the specter of default.
“It’s possible to get a deal by the end of the week,” Kevin McCarthy told reporters. “It’s not that difficult to reach an agreement,” he added.
“History teaches us that it is more likely than the other way around that a deal will be reached at the very last hour, which still leaves room for a negative news flow”, nevertheless underlines Rodrigo Catril, strategist on foreign exchange at National Australia Bank, in a note.
AT WALL STREET
With hopes of an agreement on the American debt, the indices of the New York Stock Exchange ended all three on increases of more than 1% on Wednesday.
The Dow Jones index gained 1.24% to 33,420.77 points. The broader S&P-500 gained 1.19% to 4,158.77 points and the Nasdaq Composite advanced 1.28% to 12,500.57 points.
The indices also benefited from the rebound of regional banks after the announcements of Western Alliance Bancorp, which reported an increase in its deposits over the past three months.
Western Alliance Bancorp jumped 10.19%, while the S&P-500 banking index recorded its highest daily percentage increase (+4.46%) since November 10.
IN ASIA
The Tokyo Stock Exchange’s Nikkei index gained 1.6%, its sixth straight daily increase, and hit its highest since September 2021, driven by the investment plan in the electronic chip sector and by a increase in Japanese exports in April.
The mainland Chinese stock markets evolved on a more mixed note at the end of the session, while the Hong Kong Stock Exchange gained 0.5%.
CHANGES
The dollar held Thursday near a seven-week high hit against a basket of benchmark currencies on Wednesday, buoyed by hopes of a US debt ceiling agreement.
The euro is thus under pressure and is moving to 1.0830 dollars after hitting a low the previous day at 1.0808, the lowest since April 3.
RATE
The yield on ten-year Treasuries fell to 3.574%, after climbing to 3.589% the day before, its highest since March 1.
The ten-year German Bund rate, the main benchmark for the euro zone, gained two basis points in early trading, to 2.359%.
OIL
The same optimism on the American debt pushed oil prices up nearly 3% on Wednesday, which are now retreating a little ground.
The barrel of Brent from the North Sea lost 0.43% to 76.63 dollars and that of American light crude oil (WTI) dropped 0.45% to 72.50 dollars.
(edited by Nicolas Delame)