by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected to rebound slightly on Wednesday at the opening after a bearish session, but caution should remain in order as important statistics such as inflation in the euro zone and the American GDP are to be released, not to mention a planned speech by Jerome Powell, the Fed Chairman.
Futures contracts on indices suggest an increase of 0.55% for the CAC 40 in Paris, 0.52% for the Dax in Frankfurt, 0.41% for the FTSE 100 in London and 0.51% for the EuroStoxx 50.
The monthly consumer price statistics in the euro zone will be known at 10:00 GMT and the market expects inflation to slow to 10.4% over one year, according to the Reuters consensus. Inflation decelerated slightly this month in Germany and Spain.
In the United States, the second estimate of gross domestic product (GDP) in the third quarter, scheduled for 1:30 p.m. GMT, should show a slight acceleration to 2.7% at an annualized rate after a gain of 2.6% announced in the first estimate, according to the Reuters consensus.
Federal Reserve Chairman Jerome Powell is also due to speak at 6:30 p.m. GMT at an event hosted by the Brookings Institution on the outlook for the U.S. economy and labor market as investors will have previously taken cognizance of the results of the ADP firm’s monthly survey on employment.
After four consecutive increases in the cost of credit of 75 basis points in the United States, the market expects a 63.5% probability of a limited rise in Fed rates of 50 points in December, while the probability of an increase of 75 points is evaluated at 36.5%.
AT WALL STREET
The New York Stock Exchange ended down Tuesday, with a decline in major technology stocks, including Apple (-2.1%), pending a speech by Federal Reserve Chairman Jerome Powell on Wednesday.
The Dow Jones index edged up 0.01%, or 3.07 points, to 33,852.53 points.
The broader S&P-500 lost 0.16% to 3,957.60 points.
The Nasdaq Composite, with a strong technological component, fell for its part by 65.72 points (-0.59%) to 10,983.78 points.
IN ASIA
At the Tokyo Stock Exchange, the Nikkei index ended with a loss of 0.21% to 27,968.99 points and the broader Topix, dropped 0.37% to 1,985.57 points.
In China, the SSE Composite of Shanghai nibbles 0.05% and the CSI 300 takes 0.12% in a volatile session.
Manufacturing and services activity contracted in China to 48.0 and 46.7 respectively in November amid health restrictions and slowing global demand, PMI indices released on Wednesday showed.
The management and evolution of the COVID-19 pandemic in China also continue to raise concerns, with new clashes having erupted overnight in Guangzhou, in the south of the country.
“Headlines about China over COVID-19 restrictions and protests are causing concern among investors. Even if some easing measures are being considered, it may not be enough to avert further economic disruption,” he said. Anderson Alves, macroeconomic analyst at ActivTrades.
“COVID-19 cases are expected to continue to rise; restrictions will be tightened through the end of the year, leading to further uncertainty about the impact on the economy,” he added.
VALUES TO FOLLOW IN EUROPE:
EXCHANGES/RATES
In Asian trading, the dollar fell -0.18% on Wednesday against a basket of benchmark currencies after hitting a peak since November 23.
The euro took the opportunity to take 0.22% to 1.035 dollars.
On the bond market, the ten-year German Bund yield recovered two basis points to 1.93% after having lost eight the day before in reaction to the slowdown in inflation in Germany in November.
The yield on ten-year Treasuries in the United States also fell by around two points to 3.72% before Jerome Powell’s speech.
OIL
Oil prices are rising in Asian trade with the weaker dollar and a likely fall in crude inventories in the United States last week, but uncertainties over China and the December 4 OPEC+ meeting limit gains.
Brent rose 0.84% to 83.73 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.42% to 78.53 dollars a barrel.
(Written by Claude Chendjou, edited by Tangi Salaün)
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