Former Paris Stock Exchange
by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected again on Wednesday on a hesitant note while the American Federal Reserve (Fed) must make its monetary policy decisions in the evening.
According to the first available indications, the Parisian CAC 40 should open stable at the opening. The Dax in Frankfurt is also expected unchanged. The FTSE 100 in London could fall by 0.27%. The EuroStoxx 50 index is forecast to fall by 0.05%.
After two days of debate by the FOMC, the Fed’s monetary policy committee, the American central bank will publish a press release at 6:00 p.m. GMT, which will be followed half an hour later by a press conference by its president, Jerome Powell.
As on the previous day, a wait-and-see attitude should predominate on the markets, leading to trading without much conviction and with little variation.
Markets are hoping not only that the federal funds rate, currently in a range of 5.25%-5.50%, will not move but that the US central bank will confirm that they are now at their terminal level, which under -takes another break for the November meeting.
“Markets will focus on the Fed’s language, particularly what the Fed is thinking,” said Kim Forrest, chief investment officer at Bokeh Capital Partners.
“We all have an opinion on the state of the economy, but the most important thing is what the Fed thinks. If they see signs of slowing or strengthening in the economy, that will inform us what will happen in November,” he added.
Investors will carefully study the Fed’s quarterly report on its economic projections to gauge its members’ long-term outlook, including a possible rate cut as the latest data fuels hopes for a soft landing for the Fed. ‘economy.
After the Fed, the Bank of England (BoE) and the Swiss and Norwegian central banks meet on Thursday, while the Bank of Japan (BoJ) will make its decision on Friday.
Before then, the market will take note at 06:00 GMT of consumer price figures in Britain, which may have re-accelerated in August, according to the Reuters consensus.
A WALL STREET
The New York Stock Exchange ended down on Tuesday, notably due to the decline in high-growth stocks.
The Dow Jones index fell 0.31%, or 106.57 points, to 34,517.73 points.
The broader S&P-500 lost 9.58 points, or 0.22%, to 4,443.95 points.
The Nasdaq Composite fell 32.05 points (0.23%) to 13,678.19 points.
Nine of the eleven main sectors of the S&P-500 ended the session in the red.
On the values side, among the movements of the session to note, the decline of Walt Disney after the announcement of a massive investment plan to increase the capacity of its amusement parks over the next ten years. Starbucks finished lower after TD Cowen downgraded its recommendation to “underperform.”
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index fell 0.56% to 33,054.81 points and the broader Topix fell 0.92% to 2,407.95 points as the close approached.
The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) fell by 0.2%.
In China, the Shanghai SSE Composite lost 0.42% and the CSI 300 lost 0.39%.
China kept policy rates unchanged on Wednesday, in line with expectations, as new signs of economic stabilization and a weakening yuan reduced the need for immediate monetary easing.
VALUES TO FOLLOW IN EUROPE:
EXCHANGES/RATES
The dollar remains firm (+0.04%) against a basket of reference currencies before the Fed’s announcements.
The euro is trading at $1.0678 (+0.01%) and the pound sterling at $1.2389 (-0.02%).
On the bond market, the yield on ten-year Treasuries, which hit a 16-year high of 4.367% on Tuesday, was stable on Wednesday in early trading.
In Japan, the yield on government bonds of the same maturity rose to 0.720%, reaching this level for the third time in six sessions. Before that, it had not been this high since January 2014. Japanese yields have been tightening since the BoJ governor hinted earlier this month that the central bank’s negative interest rate policy could end This year.
OIL
Oil, which rose more than 30% in three months, reaching a ten-month high, amid fears of a supply deficit at the end of the year, fell on Wednesday.
Brent fell by 0.87% to $93.52 per barrel and American light crude (West Texas Intermediate, WTI) fell by 0.9% to $90.38.
(Written by Claude Chendjou, edited by Bertrand Boucey)