Former Paris Stock Exchange building
The main European stock markets are expected to be in the green at the opening on Wednesday, with investors preparing for new political and monetary policy announcements.
Futures contracts suggest an opening increase of 0.21% for the Parisian CAC 40, against an increase of 0.11% for the FTSE in London, of 0.48% for the Dax in Frankfurt, and of 0.25 % for the Stoxx 600.
The markets continue to integrate the announcements made on Monday by Donald Trump.
“The statements regarding customs duties were more accommodating than expected,” note Goldman Sachs analysts who add that “Trump’s comments on China were significantly less aggressive than during the presidential campaign.”
“We considered 'global tariffs' to be a clear risk, but (Donald Trump's) comments suggest that, for now, this is a less significant issue.”
The American president, however, once again mentioned the implementation of customs duties against Europe and announced that he was considering imposing customs tariffs of 10% from the beginning of February against Beijing.
Donald Trump's announcements are being scrutinized with even more attention as the Federal Reserve will meet on January 29 to decide on its monetary policy, while inflation remains persistent in the United States.
The details of the measures taken by the Republican president remain essential, but most of them – immigration restrictions, customs duties, expansionary fiscal policy – will support price dynamics.
Maintaining high rates, by supporting bond yields, can act as a brake on the rise of American equities, for which the risk premium is at its lowest in 25 years.
In the longer term, higher key rates could raise the question of the sustainability of the American debt by increasing the debt burden.
The President of the European Central Bank, Christine Lagarde, will speak at the World Economic Forum in Davos on Wednesday.
Investors will be attentive to the statements of the head of monetary policy, while the ECB must deal with a slowdown in price dynamics and persistent inflation in the services sector, as well as a weakening of the euro which could trigger imported inflation.
A WALL STREET
The New York Stock Exchange ended higher on Tuesday, with the S&P-500 and Dow Jones settling at more than one-month highs, as investors took note of the inaugural measures announced by US President Donald Trump and welcomed with relief the absence of vast customs surcharges.
The Dow Jones index gained 1.24%, or 537.98 points, to 44,025.81 points.
The broader S&P-500 gained 52.58 points, or 0.88%, to 6,049.24 points.
-The Nasdaq Composite advanced 126.58 points (0.64%) to 19,756.78 points.
IN ASIA
Japanese markets ended higher, supported by the technology sector. The Nikkei index gained 1.58% to 39,646.25 points. The broader Topix gained 0.87% to 2,737.19 points.
US President Donald Trump said on Tuesday that three major companies would invest heavily in artificial intelligence infrastructure, including SoftBank, which jumped 10.4%.
Chinese markets are falling, with Donald Trump having mentioned the implementation of customs duties against Chinese imports in early February. The Hong Kong Hang Seng index declined by 1.61%, the Shanghai SSE Composite by 1.03%, the CSI 300 by 1.05%.
RATE
US yields are little changed in the absence of new data.
The yield on the ten-year Treasury is stable at 4.5825%, while the yield on the two-year security remains at 4.2784%.
CHANGES
The dollar is stabilizing after falling sharply on Tuesday, with currency traders lowering the risks of immediate customs duties which would have supported the greenback.
The dollar gained 0.08% against a basket of reference currencies, the euro eroded by 0.18% to $1.041, and the pound sterling lost 0.15% to $1.2335.
In Asia, the yen declined by 0.23% to 155.85 yen per dollar, the Australian dollar lost 0.18% to 0.626 dollars.
OIL
Oil is eroding as markets focus on Donald Trump's next decisions.
Brent fell by 0.3% to $79.05 per barrel, American light crude (West Texas Intermediate, WTI) weakened by 0.44% to $75.5.
(Written by Corentin Chappron, edited by Zhifan Liu)
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