by Laetitia Volga
PARIS (Reuters) – Variations should be limited on Thursday for stock indices in Europe after the major central banks reaffirmed their determination to fight inflation.
Futures contracts suggest a gain of only 0.01% for the Paris CAC 40, a decline of 0.03% for the Dax in Frankfurt, the FTSE in London and the EuroStoxx 50.
Invited to the annual European Central Bank (ECB) forum in Sintra, Portugal, Federal Reserve Chairman Jerome Powell reiterated on Wednesday that most members of the US central bank expect two more rate hikes this year and he does not did not rule out an additional hike in July.
“The message was broadly an extension of the views reported in previous comments and market reaction has been relatively muted,” said Stephen Wu, an economist at Commonwealth Bank of Australia.
ECB President Christine Lagarde meanwhile cemented expectations of a ninth consecutive eurozone rate hike in July.
Investors are now waiting at 12:00 GMT for the first estimate of June inflation in Germany ahead of Friday’s release of the US PCE price index.
AT WALL STREET
The New York Stock Exchange ended in disarray on Wednesday, with the Dow Jones giving ground in the face of the Fed’s offensive tone on rates, but the Nasdaq holding up thanks to Apple and other tech giants.
The Dow Jones index lost 0.22%, or 74.08 points, to 33,852.66 points, the S&P-500 ended almost flat at 4,376.86 and the Nasdaq Composite advanced 36.08 points (0. 27%) at 13,591.75 points.
Apple stock (+0.63%) hit an all-time high in session and its second straight closing record, while other groups like Tesla, Microsoft and Alphabet were also among the biggest risers of the S&P.
Chipmaker Nvidia failed to capitalize on the hype, losing 1.8% after reports from the Wall Street Journal that the United States could impose new restrictions on exports of artificial intelligence (AI) chips to China. China.
After the close, rival Micron gained 2% as its third-quarter results came in above expectations on demand for its AI memory chips.
IN ASIA
The Japanese Nikkei ended the day with a gain of 0.12%, as the decline in the yen favored exporting companies such as Nissan (+4.17%).
Concerns about the weakness of the recovery in China and the absence of a major stimulus measure lead the Chinese stock markets into the red, especially in Hong Kong, where the Hang Seng index lost 1.12%.
CHANGES
The dollar is progressing against a benchmark basket made up of several other major currencies (+0.3%) and it is not far from a peak of more than seven months against the yen, the leaders of the Fed and the Bank of Japan having confirmed to Sintra the clear divergence of their monetary policy orientations.
BoJ Governor Kazuo Ueda reaffirmed that “there is still some way to go” to sustainably achieve 2% inflation with sufficient wage growth, conditions that the central bank has set to consider a normalization of his politics.
RATE
Bond yields are on the rise, benefiting from expectations of further rate hikes.
The US ten-year and two-year take about three basis points to 3.7408% and 4.7472% respectively.
In early trading, the ten-year German Bund yield rose two basis points to 2.333%.
OIL
Fear that more rate hikes will dampen oil demand has investors taking profits: Brent fell 0.38% to $73.75 a barrel and US light crude (West Texas Intermediate, WTI) 0.35 % at $69.32.
(Laetitia Volga, edited by Bertrand Boucey and Kate Entringer)
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