PARIS (Reuters) – European stock markets are expected to decline on Wednesday, before the publication of a key inflation indicator and while American yields are at their highest since the start of the year.
According to the first available indications, the Parisian CAC 40 would be down 0.10% at the opening. Futures contracts on the FTSE in London suggest a decline at the opening of 0.34%, against 0.13% for the Dax in Frankfurt, and a hesitant EuroStoxx 50.
European markets are positioning themselves before the publication of inflation for March at 09:00 GMT, expected at 2.6% as in February. If German inflation, published on Tuesday, was slightly lower than consensus, an upward surprise on price dynamics in the bloc cannot be ruled out.
This would be bad news for the markets, as a consensus around a rate cut in June begins to emerge within the governing council of the European Central Bank (ECB).
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On Wednesday, Robert Holzmann, governor of the Austrian central bank, said he was open to a reduction in June, provided that the flow of data was reassuring.
Across the Atlantic, investors had to revise their positioning, after the publication of a survey on job offers that was better than expected. Numerous indicators have demonstrated the resilience of the American economy in recent weeks, complicating the outlook for the Federal Reserve.
The yield on the 10-year US sovereign rebounded on Tuesday to its highest since last November, putting pressure on risky assets.
VALUES TO FOLLOW:
A WALL STREET
The New York Stock Exchange ended lower on Tuesday as investors questioned the timing of the US Federal Reserve’s (Fed) rate cut, which could be later than expected, while Tesla weighed in after making reported a drop in its quarterly deliveries for the first time in almost four years.
The Dow Jones index lost 1%, or 396.61 points, to 39,170.24 points. The broader S&P-500 lost 37.96 points, or 0.72%, to 5,205.81 points. The Nasdaq Composite fell 156.38 points (0.95%) to 16,240.45 points.
Tesla lost 4.9%.
IN ASIA
The Tokyo Stock Exchange is hesitant, with investors worried about the strength of the American labor markets which could force the Fed to lower its rates later. The Nikkei index lost 0.7% to 39,570.20 points and the broader Topix gained 2.1% to 8,768.0 points.
Fast Retailing, Uniqlo’s parent company and the Nikkei’s most traded stock, fell 3.26% and put pressure on the index after reporting its first one-year sales decline at its domestic stores on Tuesday.
Chinese stocks are falling in the wake of American indices, while the powerful earthquake that hit Taiwan raises fears that the semiconductor sector will be disrupted. The Shanghai SSE Composite lost 0.18%, the CSI 300 0.24%, the Hong Kong Hang Seng index 0.83%.
RATE
US yields are stable after rebounding on Tuesday, in the wake of the publication of the Jolt survey.
The ten-year Treasury yield stagnates at 4.3572%, compared to 4.6973% for the two-year Treasury.
CHANGES
The foreign exchange markets are wait-and-see before Wednesday’s publication of European inflation and new data on American employment.
The dollar declined by 0.08% against a basket of reference currencies, while the euro gained 0.07% to 1.0775 dollars, and the pound sterling was unchanged at 1.2581 dollars.
In Asia, the yen is holding steady at 151.55 yen to the dollar, while the Australian dollar remains at $0.6519.
OIL
Crude is hesitating, under pressure from the latest indicators. A meeting between energy ministers from OPEC+ countries will be held on Wednesday but is not expected to recommend further production cuts.
Brent advanced 0.06% to $88.97 per barrel, with American light crude (West Texas Intermediate, WTI) gaining -0.04% to $85.12.
(Written by Corentin Chappron, edited by Zhifan Liu)
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