Europe expected to rise cautiously before US inflation – 05/15/2024 at 08:12

Europe expected to rise cautiously before US inflation – 05/15/2024 at 08:12
Europe expected to rise cautiously before US inflation – 05/15/2024 at 08:12

A trader works at CMC Markets, London

The main European stock markets are expected to rise on Wednesday at the opening before a new series of economic indicators, notably consumer prices in the United States, and after a speech by Jerome Powell, the president of the American Federal Reserve (Fed ), considered reassuring on inflation.

According to the first available indications, the Parisian CAC 40 could gain 0.18% at opening.

Futures contracts report an increase of 0.24% for the Dax in Frankfurt, 0.39% for the FTSE in London and 0.2% for the Stoxx 600, which recorded a new high on Tuesday at 521, 86 points.

While cautious, comments on interest rates from Fed Chairman Jerome Powell helped reassure markets after a report on U.S. producer prices on Tuesday showed stronger growth than scheduled for April.

Jerome Powell on Tuesday called the PPI data “mixed” rather than “hot” because earlier data was revised downward and said he did not think the next move by the U.S. central bank would be an increase in rates, but rather a maintenance of current rates.

In this context, the publication later on Wednesday of the report on consumer prices in the United States will be closely watched to determine whether the higher-than-expected inflation data in the first quarter was ephemeral or part of in a worrying trend.

The indicator is expected to show that prices rose 0.3% month-on-month in April after 0.4% in March, according to a Reuters poll.

In Europe, investors are awaiting first-quarter GDP figures for the euro zone and the bloc’s industrial production for March later in the day.

A WALL STREET

The New York Stock Exchange ended up on Tuesday, with the Nasdaq reaching a closing record, while comments from the President of the Fed reassured investors, focused in the middle of the week on data on prices at the production and consumption.

The Dow Jones index gained 0.32% and the broader S&P-500 gained 0.48%. The Nasdaq Composite advanced 0.75%.

The gains were supported in particular by Alphabet, Google’s parent company, which gained 0.7% after unveiling its latest innovations in the use of artificial intelligence (AI) through its services.

IN ASIA

The Nikkei index in Tokyo gained 0.05%, helped by the rise in Sony and the semiconductor sector, although caution remains in order ahead of data on US inflation.

In China, the composite index of the Shanghai Stock Exchange fell 0.28% and the CSI 300 of large capitalizations dropped 0.31% while American President Joe Biden announced on Tuesday a set of reinforced customs duties targeting imports. Chinese technologies, including electric vehicles.

The Chinese central bank also left its key rate unchanged on Wednesday, in line with expectations.

The Hong Kong Stock Exchange is closed on Wednesday due to a public holiday.

RATES/CHANGES

The yield on Treasuries is rather stable after the decline the day before, before the publication of the report on American inflation.

The yield on the ten-year bond fell by 0.4 basis points to stand at 4.4414%.

On the foreign exchange markets, the dollar lost 0.06% against a basket of reference currencies.

The euro gained 0.04% to 1.0822 dollars.

OIL

Oil prices rise on Wednesday, supported by expectations of increased demand and after the release of a report that showed a decline in US inventories, while the release of inflation data could indicate prospects more favorable economic conditions.

A barrel of Brent rose 0.69% to $82.95 and that of American light crude (WTI) gained 0.76% to $78.61.

(Writing by Diana Mandiá, editing by Kate Entringer)

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