by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to rise slightly on Tuesday at the opening and European stock markets are also moving in the green mid-session after the publication of indicators in Europe deemed reassuring and awaiting new statistics this week economic data, including US inflation figures.
Futures on New York indices signal an opening on Wall Street up 0.15% for the Dow Jones, 0.25% for the Standard & Poor’s 500 and 0.33% for the Nasdaq.
In Paris, the CAC 40 took 0.94% to 7,393.51 points around 10:20 GMT after four days of closure linked to the long Easter weekend. In Frankfurt, the Dax is up 0.58% and in London, the FTSE is up 0.43%.
The pan-European FTSEurofirst 300 index gained 0.54%, the eurozone EuroStoxx 50 0.68% and the Stoxx 600 0.51%.
Risk appetite is fueled by hopes of a pause or at least a moderation in interest rate hikes, as South Korea’s central bank kept its benchmark rate at 3.5% on Tuesday. after the status quo observed in February.
In the United States, while a 25-point rise in US Federal Reserve (Fed) rates is expected for May, investors want to believe that the end of the tightening cycle is near despite the still sustained pace of job creation in March in the US market.
The figures for consumer and producer prices in the United States, expected on Wednesday and Thursday, as well as German inflation for the month of March expected on Thursday, should confirm or invalidate this hope.
The market is pricing an 80% chance of a 25 basis point rate hike from the European Central Bank (ECB) in May and only 20% chance of a 50 basis point hike.
In the meantime, investor sentiment in the euro zone has improved since the beginning of the month with an index of -8.7 against -11.1 in March, according to the survey by the Sentix institute.
On the economic front, retail sales in the euro zone fell in February by 0.8% over one month, as forecast by the Reuters consensus, and by 3.0% over one year, a sign that the monetary tightening desired by the ECB to curb demand is bearing fruit.
The International Monetary Fund (IMF) is due to release its updated forecasts for the global economy at 13:00 GMT.
VALUES IN EUROPE
Among the major compartments of the European listing, basic resources (+2.35%), driven in particular by ArcelorMittal (+2.82%), and automotive (+2.01%), supported among others by Renault (+1.96%) and Stellantis (+2.54%), post the two strongest increases in the Stoxx 600.
In contrast, defensive sectors such as health (-0.28%), telecoms (-0.04%), and community services (-0.11%) are neglected in a context of risk taking.
In corporate news, Accor gained 1.95% as Morgan Stanley raised its recommendation to “overweight”, while Soitec, the second-best performer in the SBF 120, jumped 6.05% after an update from its forecast for 2024.
Elsewhere in Europe, UBS took 1.25% after the raising of its price target by JP Morgan and before the debate in the Swiss Parliament on the rescue of Credit Suisse (+1.20%) by UBS.
Glencore advances 2.64% while its CEO is due to meet personally Thursday in Toronto with shareholders of the Canadian group Teck Resources that the Anglo-Swiss giant wants to buy for 22.5 billion dollars (20.6 billion euros).
On the downside, the Scandinavian airline SAS fell 10.8% in fear of an exit from the stock market after its placement under the protection of bankruptcy law in the United States.
RATE
Ten-year and two-year bond yields in the United States fell by around two basis points, to 3.3962% and 3.989% respectively.
The movement is reversed in the euro zone, where the ten-year and two-year German Bund yields rose respectively to 2.258% (+7 basis points) and 2.669% (+12 points), catching up with the rise recorded on Friday and Monday by US rates after the publication of the monthly employment indicator in the United States.
The yield on two-year Treasuries gained 15 basis points on Friday and four points on Monday.
EXCHANGES The dollar retreated on Tuesday (-0.35%) after its recent rise against a basket of benchmark currencies.
The euro, which lost 0.34% on Monday, took the opportunity to rise to 1.0913 dollars (+0.5%), while the pound sterling advanced 0.47% to 1.2442 dollars.
In cryptocurrencies, bitcoin is trading at $30,092.5 (+3.28%) after hitting a new ten-month high of $30,438 on Tuesday.
OIL
Oil prices are supported by the expected drop in crude inventories in the United States last week and hopes of a demand stimulus from Beijing, as monthly consumer price data in China came in below expectations.
Brent rose 0.23% to 84.37 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.29% to 79.97 dollars.
(Written by Claude Chendjou, edited by Blandine Hénault)
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