by CORENTIN CHAPPRON
PARIS (Reuters) – Wall Street is expected to be little changed at the open and European stocks erased some of their morning gains mid-session, ahead of the release of much-anticipated U.S. inflation data the day before. of the Federal Reserve’s monetary policy decision.
Futures on New York indices signal an almost stable opening for the Dow Jones and an increase of 0.03% for the Standard & Poor’s 500, while the Nasdaq should rise by 0.15% thanks to the good performance of the “tech” segment after Oracle’s results.
In Paris, the CAC 40 is practically unchanged at 7,248.63 points around 11:55 GMT after having taken up 0.8% in the morning. In Frankfurt, the Dax advanced by 0.1% and in London, the FTSE fell by 0.09%.
The pan-European FTSEurofirst 300 index gained 0.08%, the euro zone EuroStoxx 50 0.05% while the Stoxx 600 was stable.
The release of US inflation data, scheduled for 12:30 GMT, will give an indication to markets of the extent of the Fed’s monetary policy transmission and the future path of US rates.
The US central bank begins Tuesday two days of meetings ahead of its monetary policy decision, which will be announced on Wednesday, while the decisions of the European Central Bank (ECB) and the Bank of Japan (BoJ) are expected respectively on Thursday and Friday.
Markets are betting on a pause in the US monetary tightening cycle, even as the central banks of Australia (RBA) and Canada (BoC) surprised markets last week by raising rates again after setting them in break.
“The Fed’s decision will be 50/50: the central bank could raise rates, and I think they should, because it will give them more flexibility in July and for the rest of the year,” says CMC Markets chief strategist Michael Hewson.
“We’re very close to the Fed’s peak rate, and it all depends on how much strength the dollar still has. In fact, I’m not sure the Fed will be able to go much higher than another 25 bps, but this certainly not the case with the ECB or the Bank of England”.
WALL STREET VALUES TO FOLLOW (Full Story)
Oracle shares gained more than 4% in pre-market trading after hitting an all-time high in Monday’s session, thanks to the release after Wall Street’s close of better-than-expected quarterly results.
VALUES TO FOLLOW IN EUROPE (Full Story)
The CAC 40 is driven by Téléperformance (+2.98%) and Saint Gobain (+2.27%), which announced on Monday that it had signed a definitive agreement to acquire Building Products of Canada for an amount of approximately 925 million euros.
On the SBF 120, Casino fell 3% after two sessions of strong growth and Verallia (-7%) suffered from the drop in Berengerg’s recommendation to “hold” against “buy”.
In the wake of Oracle’s surge, the European tech sector (+1%) posted the second best performance of the Stoxx 600 sectors, behind basic resources (+1.96%) which benefited from the rise metal prices.
RATE
In the euro zone, short-term yields are rising while long-term securities are falling: the ten-year German Bund rate thus lost almost two basis points to 2.365%, while that of the two-year German bond rose to 2.983%, close to its three-month peak of 3% reached last week.
In the United States, the yield of ten-year Treasuries fell by nearly four basis points, to 3.724% and that of two years lost two basis points, to 4.571% before the US inflation figures.
CHANGES
In the wake of Treasuries, the dollar fell 0.32% against a basket of benchmark currencies.
The euro took the opportunity to rise against the greenback and traded at 1.0794 dollars.
The pound rose 0.45% to 1.2568 dollars, boosted by the unexpected strength of the labor market in the United Kingdom, which is fueling expectations of further monetary tightening by the Bank of England.
OIL
Oil prices are regaining ground after their drop on Monday.
Brent gained 2% to 73.29 dollars a barrel and American light crude (West Texas Intermediate, WTI) took 1.79% to 68.32 dollars.
(Report Corentin Chapron, edited by Blandine Hénault)
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