RISE EXPECTED TO CONTINUE ON WALL STREET BEFORE PRODUCER PRICES
by Laetitia Volga
PARIS (Reuters) – European stock markets are more cautious on Thursday mid-session as Wall Street is expected to rise, still supported by signs of weakening US inflation, pending new economic data that could fuel the debate on the evolution of Federal Reserve (Fed) rates. Futures contracts signal a gain of 0.44% for the Dow Jones, 0.39% for the Standard & Poor’s-500 and 0.31% for the Nasdaq. In Paris, the CAC 40 dropped 0.14% to 6,514.19 around 11:40 GMT. In Frankfurt, the Dax gained 0.09% and in London, the FTSE lost 0.43%.
The pan-European FTSEurofirst 300 index fell 0.12%, the eurozone EuroStoxx 50 advanced 0.03% and the Stoxx 600 0.04%.
While lower than expected consumer price figures in the United States reassured Wednesday, several officials of the institution – from the “hawk” Neel Kashkari to the “dove” Mary Daly – left no doubt on the fact that the US central bank will continue to tighten its monetary policy until inflationary pressures subside for a long time.
But money markets are pricing in a less restrictive Fed bias next month than before the inflation data came out, with a little over 60% chance of a 50 basis point rate hike in September. and about 40% chance of a 75 basis point hike.
“For more and more traders, the next inflation report on September 13 will confirm the trend of easing price pressure,” said Edward Moya, an analyst at Oanda. “It’s too early to say that the Fed will only raise its rate by half a point next month, but if inflation continues to subside, the Fed’s dovish tendencies will return.”
The rest of the session will be animated by the publication at 12:30 p.m. of producer prices in the United States, which could shed another light on the evolution of inflation. VALUES TO FOLLOW ON WALL STREET
In trading before the opening of Wall Street, the title Walt Disney gained 7%, the global entertainment giant having announced on Wednesday evening that its video streaming platforms (Disney +, Hulu and ESPN +) totaled more subscribers than Netflix.
VALUES IN EUROPE
In Europe, Sanofi fell 9.50%, by far the largest drop in the CAC 40, affected by fears that legal proceedings against Zantac in the United States would lead to costly decisions.
Valneva drops 2.65% as the French lab lowered its annual revenue target due to falling orders for its COVID-19 vaccine. Insurer Aegon gains 10.25% after raising its forecast in working capital generation for the year and free cash flow for 2021-2023, supported by a better than expected second quarter operating profit.
Siemens erases its losses after losing 2.2% in session in reaction to the announcement of a quarterly loss, the first time in nearly 12 years, due to a depreciation on Siemens Energy and its departure from Russia.
Ten-year Treasury yields are stabilizing as several Fed members insisted on continued monetary tightening despite the slowdown in inflation in July. It is around 2.77% after a low the day before in session at 2.674%.
On the European market, the yield of the Bund of the same maturity recovered two basis points to 0.906% against 0.837% at its lowest on Wednesday.
The dollar continues to depreciate against a basket of other international currencies (-0.2%) in response to US inflation data.
The euro, for its part, gained 0.34% to 1.0332 dollars.
Oil prices are on the rise after the International Energy Agency raised its forecast for crude demand growth this year, as soaring gas prices prompted some consumers to turn to oil.
Brent gained 0.73% to 98.11 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.82% to 92.68 dollars.
MAIN ECONOMIC INDICATORS ON THE AGENDA FOR AUGUST 11:
COUNTRY GMT INDICATOR PERIOD PREVIOUS CONSENSUS
USA 12:30 p.m. Unemployment claims week at 263,000 260,000
USA 12:30 p.m. Producer price July +0.2% +1.1%
– over one year +10.4% +11.3%
(Laetitia Volga, editing by Kate Entringer)