PARIS (Reuters) – European stock markets are expected to fall at the opening on Tuesday, before the publication of several indicators, including an indicator on price dynamics in the United States, and before a speech by the president of the Federal Reserve (Fed ), Jerome Powell.
According to the first available indications, the Parisian CAC 40 would erode by 0.04% at the opening. Futures contracts on the FTSE in London suggest a decline at the opening of 0.21%, compared to 0.08% for the Dax in Frankfurt, and 0.04% for the EuroStoxx 50.
Indicator publications resume after several sessions without data, as markets look for a catalyst after the latest Fed meeting.
The elements expected in the coming days will indeed make it possible to gauge whether the disinflation process continues, and under what conditions central banks will be able to lower their rates this year.
In the United States, producer prices for April, considered a good indicator of PCE inflation dynamics, will be released at 12:30 GMT. Jerome Powell is expected to speak at 2:00 p.m. GMT, and could comment again on American activity, which is moderating but remains robust.
CPI inflation for April will be published on Wednesday. If the indicator is not the one favored by the Fed to gauge price movements – the central bank prefers PCE inflation – an upward surprise would be bad news for investors, who were expecting 5 rate cuts early 2024 and are now reduced to hoping for a rate cut from the Fed this year.
Money markets are counting on 40 basis points of easing in 2024, i.e. a decline of 25 bp certain and a second probable at 60%.
In the eurozone, final German inflation for April and the Zew sentiment indicator for May are expected at 06:00 and 09:00 GMT respectively. If the European Central Bank is preparing to relax its monetary policy, observers will nevertheless be attentive to the extent of the rebound in activity in the bloc, after a year and a half of sluggish growth.
AT WALL STREET
The New York Stock Exchange paused Monday after three weeks of gains and as investors await key U.S. inflation figures this week to gauge the pace of the expected decline in interest rates this year.
The Dow Jones index fell 0.21%, or 81.33 points, to 39,431.51 points. The broader Standard & Poor’s 500 lost 1.26 points, or 0.02% to 5,221.42 points. The Nasdaq Composite advanced 47.37 points (0.29%) to 16,388.238.
IN ASIA
The Tokyo Stock Exchange is hesitant, with investors remaining cautious before the publication of American data, but a few results are livening up trading. The Nikkei index gained 0.12% to 38,227.07 points and the broader Topix was stable at 2,722.66 points.
Furukawa Electric jumped 18.01%, the best performance of the index, after the publication of its results, while the chemical company Tosoh fell 7.96%, the bottom of the index.
Chinese indices are falling, as investors worry about the implementation of new customs barriers to Chinese exports, and as investors await new US data. The Hong Kong Hang Seng index lost 0.13%, the Shanghai SSE Composite 0.12%, the CSI 300 0.27%.
RATE
US yields are uncertain ahead of data due on Tuesday.
The yield on the ten-year Treasury is unchanged at 4.4865%, like that on the two-year, at 4.8548%.
CHANGES
The yen weakens before the publication of producer prices in the United States, which could revive fears of a lasting divergence in American and Japanese monetary policies.
In Asia, the yen fell by 0.13% to 156.4 yen per dollar, the Australian dollar declined by 0.17% to 0.6596 dollars.
The dollar is stable against a basket of reference currencies, while the euro is standing still at $1.0785, and the pound sterling is eroding by 0.06% to $1.2551.
OIL
Crude is up slightly, with markets positioning themselves before the publication of American indicators and before the monthly OPEC report, expected on Tuesday.
Brent nibbles 0.12% to 83.46 dollars per barrel, American light crude (West Texas Intermediate, WTI) gaining 0.13% to 79.22 dollars.
(Corentin Chappron)
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