Europe seen uncertain at opening before the BoE – 05/09/2024 at 07:35

Europe seen uncertain at opening before the BoE – 05/09/2024 at 07:35
Europe seen uncertain at opening before the BoE – 05/09/2024 at 07:35
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Photo of buildings in the La Défense business district in Paris

European stock markets are expected to be hesitant at the opening on Wednesday, before the next monetary policy meeting of the Bank of England (BoE) and after encouraging data from China.

According to the first available indications, the Parisian CAC 40 appears uncertain at the opening. Futures contracts on the FTSE in London suggest an opening advance of 0.14%, against a Dax in Frankfurt and a EuroStoxx 50 expected to be stable.

The BoE will meet at 11:00 GMT and is expected to announce that it will maintain its rate at its current level, at 5.25%, for the sixth consecutive time. Observers will be watching for any indication that the BoE will start cutting rates in June.

“No rate cut is expected on Thursday, but a cut in June is still on the table with a probability close to 50-50. Forward guidance will be closely monitored,” explain ING strategists.

“After the dovish stance taken by (Jerome) Powell last week, markets will be looking to see if the direction the BoE takes will be the same as that of the Federal Reserve.”

The central bank will also publish updated economic forecasts, while inflation surprised on the rise in March.

The latest data from China also shows that the recovery is being confirmed.

Exports increased by 1.5% year-on-year in April, in line with consensus, while imports advanced by 8.4% in April, after a drop of 1.9% the previous month. The consensus was 4.8%.

Trading volumes will be limited as May 9 is a public holiday in many European countries.

A WALL STREET

The New York Stock Exchange ended mixed on Wednesday, with only the Dow Jones finishing higher, in the absence of a catalyst during the session and as momentum generated by optimism over a dovish turn in policy of the Fed has run out of steam.

The Dow Jones index gained 0.44%, or 172.13 points, to 39,056.39 points. The broader S&P-500 lost 0.03 points, to 5,187.67 points. The Nasdaq Composite fell 29.80 points (0.18%) to 16,302.76 points.

Intel fell 2.2% following a warning on its sales linked to the revocation by the American administration of certain export licenses to China.

IN ASIA

The Tokyo stock market is uncertain after its decline last session, supported by opportunistic purchases. The Nikkei index is stable at 38,209.51 points, and the broader Topix takes 0.52% to 2,720.37 points.

Tokyo Electron fell 2.04%, while Omron jumped 7.74%, after the medical equipment maker’s full-year forecast came in better than expected.

Chinese indices are rising after encouraging data from April and while certain purchasing restrictions were lifted on residential real estate. The Hong Kong Hang Seng index advanced 1.04%, the Shanghai SSE Composite gained 0.87%, the CSI 300 0.98%.

RATE

US yields do not vary, with no indicator or statement causing the markets to react.

The ten-year Treasury yield climbs 2.1 bps to 4.5042%, while the two-year rate is stable at 4.849%.

CHANGES

Foreign exchange markets are stable in the absence of a catalyst.

In Asia, the yen eroded by 0.06% to 155.58 yen per dollar, the Australian dollar fell by 0.05% to 0.6575 dollars.

The dollar is stable against a basket of reference currencies, while the euro remains at $1.0742 and the pound sterling declines by 0.07% to $1.2487.

OIL

Crude is increasing after a drop in oil inventories of 1.4 million barrels last week, according to figures from the Energy Information Administration, against a decline of 1.1 million barrels expected by analysts.

Brent strengthened by 0.43% to $83.94 per barrel, with American light crude (West Texas Intermediate, WTI) gaining 0.57% to $79.44.

(Written by Corentin Chappron)

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