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Market: Few changes in sight on Wall Street, uncertainties about the Fed remain


by Laetitia Volga

PARIS (Reuters) – Wall Street is expected to show little change at the opening and European stock markets, with the exception of London, rose mid-session on Thursday despite the publication of the minutes of the last meeting of the Federal Reserve (Fed) and comments from a European Central Bank (ECB) official that the outlook for inflation has not improved.

Futures contracts are signaling a gain of 0.09% for the Dow Jones, 0.13% for the Standard & Poor’s-500 and 0.12% for the Nasdaq.

In Paris, the CAC 40 gained 0.33% to 6,550.08 around 11:35 GMT. In Frankfurt, the Dax took 0.61% and in London, the FTSE was stable (-0.01%).

The pan-European FTSEurofirst 300 index advanced by 0.3%, the EuroStoxx 50 of the euro zone by 0.29% and the Stoxx 600 by 0.21%.

Wall Street ended in the red on Wednesday after the publication of the “minutes” of the Fed. The document shows that at the July 26-27 meeting, US central bank officials saw little evidence of easing inflationary pressures in the United States.

They pledged to raise rates as much as necessary to control inflation, although they began to recognize more explicitly the risk of doing too much.

On the ECB side, executive board member Isabel Schnabel told Reuters that the inflation outlook in the euro zone had not improved since the half-point rate hike in July, leaving to think that this would be favorable to another sharp rise in rates next month, even if the risks of recession increase.

The rise in inflation in the euro zone in July was confirmed at 8.9% year on year by Eurostat

Norges Bank, Norway’s central bank, raised its key rate by 50 basis points as expected.

In trading before the opening of Wall Street, retail group Kohl’s fell 10% after lowering its annual forecast due to the impact of inflation.

VALUES IN EUROPE

Among the most marked sectoral increases in Europe, we find cyclical compartments such as the automobile (+1.01%) and raw materials (+0.84%) while the Stoxx retail index shows the largest drop (-0.75%).

In Paris, Valneva lost 2.72%, the US Department of Defense having decided not to exercise the second annual option of the contract for the supply of its vaccine against Japanese encephalitis.

The Dutch group Adyen, which processes payments for Netflix or Facebook, fell 11.39% after publishing a quarterly gross operating surplus below expectations.

Several large British groups, such as Anglo American (-2.29%) and HSBC (-1.17%), trade ex-dividend, which slows down the Footsie index.

RATE

Eurozone government bond yields are up after Isabel Schnabel’s comments on inflation. That of the ten-year German Bund, a benchmark for the euro zone, gained nearly two basis points to 1.106%, and its French equivalent was displayed at 1.669%.

The yield of US Treasuries of the same maturity is down slightly, to 2.8749%, after rising the day before at most in one month to 2.919%.

CHANGES

The dollar index, which measures the variations of the greenback against a basket of currencies, is stabilizing (+0.08%) after reaching its highest level in three weeks with the “minutes” of the Fed.

“It looks like the only thing that can slow the dollar is a U-turn from the Fed, which would likely only come in the face of signs of much weaker growth in the US or stronger evidence of a pullback in the dollar. inflation. For now, it looks like the dollar will continue to smile,” commented analysts at DBS Group Research.

The euro for its part returned to around 1.0185 dollars, down 0.06%.

OIL

Oil prices rose after the Energy Information Agency (EIA) announced a sharper-than-expected drop in crude inventories in the United States and the prospect of a decrease in Russian offer at the end of the year.

Brent gained 1.19% to 94.76 dollars a barrel and American light crude (West Texas Intermediate, WTI) took 0.86% to 88.87 dollars.

(Written by Laetitia Volga, Editing by Kate Entringer)

Copyright © 2022 Thomson Reuters



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