by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected without much change at the opening after the publication of the “minutes” of the last meeting of the American Federal Reserve (Fed) and before those of the European Central Bank (ECB), but the trend could be supported by the hope of a lull in interest rates.
According to the first indications available, the Dax in Frankfurt should gain 0.03% at the opening, the FTSE 100 in London could fall by 0.09% and the EuroStoxx 50 index by 0.05%.
The markets are closed this Thursday in the United States for the Thanksgiving holiday, while the session will be shortened on Friday.
Fed officials signaled on Wednesday that a “substantial majority” of the bank’s monetary policy committee (FOMC) members believed it would be “probably soon” appropriate to slow the pace of rate hikes, according to the account. – minutes of their meeting on November 1 and 2.
Markets are pricing in a 76% probability of a US rate hike of half a point in December to 4.25-4.5% before peaking above 5% in May 2023.
The Central Bank of South Korea chose to raise its rates on Thursday by only a quarter point to 3.25%, after rising by half a point in October.
The ECB must in turn publish, at 12:30 GMT, the minutes of its last monetary policy meeting. A Reuters survey predicts a limited 50bp hike in ECB rates next month after a 200bp rise since July.
Before these “minutes”, investors will take note of the monthly indices of the business climate in France and Germany where a slight improvement is expected across the Rhine while a deterioration is expected in France.
The rest of the session could once again be driven by energy speculation, with a European Commission proposal for a one-year gas price cap, according to a draft regulation seen by Reuters, to be discussed this Thursday.
The day before an EU diplomat said the G7 countries were also discussing capping Russian oil prices above current levels.
AT WALL STREET
The New York Stock Exchange ended higher on Wednesday after the publication of the minutes of the last monetary policy meeting of the Fed which reinforced hopes of a slowdown in the pace of rate hikes in the United States.
The Dow Jones Industrial Average rose 95.96 points (0.28%) to 34,194.06, the S&P 500 gained 23.68 points, or 0.59%, to 4,027.26 and the Nasdaq Composite gained 110.91 points, or 0.99%, at 11,285.32.
IN ASIA
At the Tokyo Stock Exchange, closed Wednesday, the Nikkei index ended Thursday with a gain of 0.95% to 28,383.09 points and the broader Topix rose 1.21% to 2,018.8 points.
On the economic statistics side, manufacturing activity contracted in November at its fastest pace in two years, with the PMI index falling to 49.0 from 50.7 in October, according to data released on Thursday.
In China, the Shanghai SSE Composite fell 0.18% and the CSI 300 lost 0.37%, as the country reported a daily record number of new infections with the virus responsible for COVID-19, i.e. 31,444 cases on November 23, according to official data.
However, the Chinese authorities have indicated that they are considering adopting new stimulus measures for the economy and reducing the reserve requirement ratio for banks.
CHANGES
In foreign exchange, the dollar fell 0.13% against a basket of international currencies after having already lost nearly 1% the day before, in reaction to the publication of the “minutes” of the Fed.
The euro took the opportunity to rise to 1.0434 dollars (+0.38%), while the pound sterling advanced by 0.28% to 1.2086 dollars.
RATE
Long-term bond yields ended lower on Wednesday: that of the ten-year German Bund fell five basis points to 1.92%, while its American equivalent of the same maturity was posted at 3.69%.
OIL
Oil prices are penalized by a possible price cap for Russian crude by the G7 countries: Brent fell 0.57% to 84.92 dollars a barrel and American light crude (West Texas Intermediate, WTI) by 0, 53% to $77.53 a barrel.
(Written by Claude Chendjou, edited by Nicolas Delame)
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