Market: Europe expected in disjointed order with the Fed and indicators

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by Pauline Foret

PARIS (Reuters) – The main European stock markets are expected to be in disarray at the opening on Thursday after the publication of the “minutes” of the last meeting of the Federal Reserve and awaiting several major economic indicators.

According to the first available indications, the Parisian CAC 40 could open down 0.11%.

Futures contracts report a decline of 0.01% for the Dax in Frankfurt, a rise of 0.13% for the FTSE in London, and a decline of 0.18% for the Stoxx 600.

Published on Wednesday, the “minutes” of the Fed’s September 17-18 meeting show that a “substantial majority” of officials at the institution supported an unusual rate cut of 50 basis points.

There was consensus, however, that the move did not commit the US central bank to any threshold or timetable for further reducing borrowing costs.

According to FedWatch, investors are now betting 82% on a 25-point rate cut next month.

Markets are now holding their breath awaiting the release of US “CPI” data for the month of September, which will be released around 2:30 p.m.

“A higher-than-expected inflation reading would allow yields to extend recent gains and traders to lower expectations of a Fed rate cut in November,” said Tony Sycamore, markets analyst at IG, adding: “Such a scenario should call into question the idea of ​​a ‘Goldilocks’ economy and worry the stock markets.”

Investors will also be able to digest the publication, later in the day, of data on retail sales in Germany as well as weekly unemployment claims in the United States.

VALUES TO FOLLOW:

Airbus announced on Wednesday that it had won 648 net orders over the January-September period and delivered 497 aircraft since the start of the year.

Valneva is hosting its investor day on Thursday.

A WALL STREET

The New York Stock Exchange ended higher on Wednesday, with the S&P-500 and the Dow Jones reaching closing records after the publication of the minutes of the latest meeting of the Federal Reserve.

Although it erased some of its initial losses, Alphabet ended lower after the US Department of Justice indicated that it could ask a judge to force Google, owned by the technology giant, to separate from some of its activities.

Also note, on the value side, the 3.4% decline in Boeing while discussions between the aircraft manufacturer and a major workers’ union are at an impasse.

IN ASIA

Asian markets are moving forward in China’s wake on Thursday, with the Chinese central bank launching its 500 billion yuan program to stimulate capital markets.

Tokyo ended higher, with the Nikkei index gaining 0.26% and the broader Topix advancing 0.2%.

In China, the composite index of the Shanghai Stock Exchange increased by 2.61% and the CSI 300 of large capitalizations advanced by 2.36%.

RATE

US bond yields continue their gains on Thursday, with investors counting on a less aggressive round of monetary easing from the Federal Reserve and after a smaller-than-expected 10-year bond auction.

The yield on ten-year Treasuries gained 1.1 basis points to 4.0785%, compared to 0.1 basis points to 4.0180% for the two-year.

The yield on the ten-year German Bund, the benchmark for the euro zone, gained 1.1 basis points to 2.2670%, compared to 2.2820% for the two-year.

CHANGES

In the wake of bond yields and debate over the Federal Reserve’s key rate cut, the dollar is stabilizing somewhat after posting substantial gains on Wednesday.

The dollar lost 0.01% against a basket of reference currencies.

The euro lost 0.02% to 1.0937 dollars.

OIL

Oil prices rose Thursday, supported by a surge in fuel demand ahead of Storm Milton in Florida and concerns about supplies from exporting countries in the Middle East.

The barrel of Brent increased by 0.76% and that of American light crude (WTI) gained 0.81%.

(Written by Pauline Foret, edited by Augustin Turpin)

Copyright © 2024 Thomson Reuters

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