PARIS (Reuters) – Wall Street is expected to rise and European stock markets, with the exception of London, rose mid-session on Wednesday thanks to bargain purchases after the decline of the last few days, but this respite is likely to be brief, continued tensions over UK yields and the start of the earnings season limiting the potential for a sustained rebound.
Futures contracts on the main New York indices suggest an increase of 0.4% for the Dow Jones, 0.57% for the Standard & Poor’s 500 and 0.78% for the Nasdaq.
In Paris, the CAC 40 gained 0.17% to 5,843.24 points around 10:55 a.m. and in Frankfurt, the Dax advanced by 0.18% while in London, the FTSE 100 dropped 0.08%.
The EuroStoxx 50 index is up 0.25%, the FTSEurofirst 300 0.04% and the Stoxx 600 0.02%.
The latter remained on five consecutive sessions of decline which made him lose 3.74% in total and the MSCI world index fell on Tuesday to its lowest level in two years.
The trend in the US markets will be influenced by the producer price figures for September, due at 12:30 GMT and which should mark a slight slowdown in inflation since the Reuters consensus gives them up 8.4% year on year. after +8.7% in August.
Investors will also be watching for minutes from the Federal Reserve’s September meeting at 6:00 p.m. GMT. US consumer price figures, the most anticipated of the week, will be released on Thursday.
In Europe, while industrial production in the euro zone was a little better than expected in August, the UK indicators of the day confirmed that the UK economy was on the road to recession even before the tensions on the markets caused by the budget projects of the government of Liz Truss.
RATE
The two-year US yield, the most sensitive to expectations of changes in interest rates, fell slightly to 4.2995%, while the ten-year rose to 3.9596%.
But investors are mainly watching the British bond market after the confirmation by the Bank of England of its intention to put an end to the purchases of securities on Friday supposed to ease the tensions of the last few weeks, at the risk of putting some pension funds in difficulty.
The British 10-year rose 10 basis points to 4.54% and the 30-year rose above 5% for the first time since September 28.
The tensions on the “gilts” have repercussions on the other European markets: the ten-year German, benchmark for the region, is up seven basis points at 2.386%, a new peak of 11 years, and its French equivalent more than eight points to 2.977%.
WALL STREET VALUES TO FOLLOW
VALUES IN EUROPE
In Europe, among the strongest sectoral increases of the day are sectors which had suffered heavy losses in recent days, such as technologies, whose Stoxx index takes up 0.38%, or chemicals (+ 0.61%) .
STMicroelectronics thus gains 1.22% and Bayer 2.23%.
In the news of the results, LVMH (+ 1.83%) benefits from its quarterly turnover higher than expectations and drags behind it Hermès (+ 1.82%) and Kering (+ 0.44%).
Down, Philips fell 8.94% after saying it estimated a 60% decline in operating profit in the third quarter, mainly due to quality problems with its respirators.
CHANGES
The dollar is losing some ground against the other major currencies (-0.04%) as the US producer price figures approach. But it hit a new 24-year high against the yen, surpassing the level at which the Bank of Japan intervened in the market last month.
The euro is practically stable against the greenback at 0.971 (+0.07%) after falling to 0.9670.
The pound, it is recovering 0.91% after the low of two weeks hit at the beginning of the session against a backdrop of rising bond yields.
OIL
The oil market is erasing some of the decline suffered on Tuesday as the prospect of OPEC+ production cuts continues to offset the impact of the strong dollar and fears of weaker demand, stoked on Tuesday by new forecasts of the International Monetary Fund.
Brent recovered 0.45% to 94.71 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.21% to 89.54 dollars.
They had both lost almost 2% the day before.
(Written by Marc Angrand)