PARIS (Reuters) – Wall Street is expected to be hesitant at the opening on Monday, while European stock markets are mixed at mid-session, with markets cautious ahead of a series of monetary policy decisions and indicators this week.
Futures on New York indices suggest a hesitant opening on Wall Street, with the Dow Jones not showing a marked direction, while the Standard & Poor’s 500 could lose 0.1% and the Nasdaq 0.21%.
In Paris, the CAC 40 advanced 0.15% to 7,538.12 points around 11:13 GMT, compared to a decline of 0.6% for the FTSE in London. The Dax in Frankfurt is stable.
The pan-European FTSEurofirst 300 index lost 0.17%, compared to an increase of 0.11% for the EuroStoxx 50 and a decline of 0.12% for the Stoxx 600.
Investors are hesitant ahead of a busy week of monetary policy releases and meetings, which will determine the trajectory of rates and economies in 2024.
As for American indicators, CPI inflation for November will be published on Tuesday, followed by producer prices on Wednesday, and retail sales for November on Thursday. Industrial production for November is expected on Friday.
In the euro zone, industrial production is expected on Wednesday, followed on Friday by PMI activity indicators and French inflation.
On the central bank side, the Federal Reserve will open the monetary policy meeting sequence on Wednesday, while the European Central Bank and the Bank of England will meet on Thursday.
Markets expect all three central banks to hold rates at current levels, according to swap markets, but a pause in rate hikes will not equate to a more dovish positioning.
Inflation remains above its target in each of the three zones, and central banks will have to maintain monetary policy at a restrictive level to bring it back to the objective, which will require more aggressive speeches.
“This is the last stand of central banks, (which) should keep rates unchanged,” summarizes Christopher Dembik, investment strategy advisor at Pictet AM.
“Everyone would like them to give indications on the direction of monetary policy in 2024: it is too early, in our opinion. In the best case scenario, they should welcome the fall in inflation which allows “consider a possible pivot next year”.
VALUES TO FOLLOW IN WALL STREET
Cigna, the health insurer, canceled its plan to buy Humana, the Wall Street Journal reported Sunday, and also announced plans to buy back $10 billion of its shares.
An investor group including Arkhouse Management and Brigade Capital has made a $5.8 billion offer to delist department store chain Macy’s.
VALUES TO FOLLOW IN EUROPE
Atos grew by 4% after being selected by Canal de Isabel II for the development of its Yara commercial platform.
Syensqo advances by 11.57%, after having climbed up to 13% on its first day on the Brussels Stock Exchange, after its split from the Belgian chemical group Solvay. The former parent company of Syensqo lost 26.87%, at the bottom of the Stoxx 600.
Uniper gains 15.32% after approval of a capital reduction proposal.
The Norwegian group Schibsted jumped 17.10% after announcing a non-binding agreement worth 527.6 million euros for the sale of its news media activities to Tinius Trust, its main shareholder.
Encavis fell 6.41%, among the worst performances on the Stoxx 600, with Morgan Stanley having lowered its advice on the German renewable energy group to “underweight”.
RATE
Returns are stable in a wait-and-see environment.
The ten-year Treasury yield is unchanged at 4.2525%, while the two-year yield nibbles 1.5 basis points to 4.7416%.
The yield on the German ten-year rate fell slightly, by 1.7 basis points to 2.25%, that of the two-year rate lost 1.5 basis points to 2.674%.
CHANGES
Foreign exchange markets are sluggish ahead of several central bank meetings this week.
The dollar is stable against a basket of reference currencies, the euro takes 0.09% to 1.0771 dollars, and the pound sterling 0.15% to 1.2565 dollars.
OIL
Crude is eroding, with markets worrying about an imbalance between supply and demand, but oil purchases intended to replenish the American Strategic Petroleum Reserve are limiting the decline in prices.
Brent fell 1.08% to $75.02 per barrel, American light crude (West Texas Intermediate, WTI) fell -1.21% to $70.37.
(Written by Corentin Chappron, edited by Kate Entringer)
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