* CAC 40 expected to fall by 0.2%, Stoxx 600 by 0.18%
* Eurozone inflation expected at 09:00 GMT
*
Powell and Lagarde to speak, along with several other monetary policy officials
* Political uncertainties add to nervousness
PARIS, July 2 (Reuters) – European stocks are expected to decline on Tuesday as investors brace for a barrage of data and policy commentary as political uncertainty persists.
According to the first available indications, the Parisian CAC 40 would be down 0.20% at the opening. Futures contracts on the FTSE in London suggest a decline at the opening of 0.37%, against 0.29% for the Dax in Frankfurt, and 0.18% for the EuroStoxx 50.
Eurozone inflation for June is expected at 0900 GMT, a crucial indicator for gauging the monetary policy trajectory of the European Central Bank (ECB) after its first easing in June.
Adding to the markets’ caution, ECB President Christine Lagarde said late Monday that there was no rush to cut rates again, as investors bet on just under two 25 basis point cuts in 2024.
In the United States, the JOLT job openings report, a closely watched indicator by the Federal Reserve, will be published at 1400 GMT and should show that tensions are dissipating on American employment which has until now been one of the main factors of inflation across the Atlantic.
Fed Chairman Jerome Powell will also speak alongside Christine Lagarde at the Sintra forum at 1230 GMT. Several other policymakers will also speak on Tuesday.
While the busy macroeconomic calendar will keep markets on alert, nervousness could also rise again this week ahead of the second round of French legislative elections, with a large victory for the National Rally remaining a possibility that would surprise investors.
The latter are also concerned about a possible victory for Donald Trump in the American elections, which would probably involve a widening of the American deficit, after the poor performance of Joe Biden in the first debate between the two candidates.
VALUES TO FOLLOW:
ON WALL STREET
The New York Stock Exchange ended higher on Monday, buoyed by new technology, while investors await the US employment figures due to be published this week to see a trend towards lower interest rates.
The Dow Jones Industrial Average gained 0.1 percent, or 50.66 points, to 39,169.52. The broader Standard & Poor’s 500 gained 14.61 points, or 0.3 percent, to 5,475.09. The Nasdaq Composite Index advanced 146.697 points, or 0.8 percent, to 17,879.3.
In stocks, Apple gained 2.9%, Microsoft gained 2%, Amazon. Tesla saw its stock climb 6.1% after publishing its vehicle delivery figures for the second quarter.
IN ASIA
The Tokyo Stock Exchange rose, supported by financial stocks as investors bet on upcoming rate hikes by the Japanese central bank. The Nikkei index fell 1.17% to 38,646.11 points and the broader Topix index fell 0.49% to 2,741.34 points, hitting a new high for the year.
Insurers gained 2.81%, banks 1.87%.
Chinese indices are hesitant as investors digest the latest data and await further economic support measures. Hong Kong’s Hang Seng Index is up 0.41%, Shanghai’s SSE Composite is unchanged, and the CSI 300 is down 0.12%.
RATE
US yields are declining after rebounding on Monday as investors fear a rise in the US deficit after the election.
The 10-year Treasury yield fell 3.7 bps to 4.4415%, while the two-year rate eroded 1.8 bps to 4.7537%.
CHANGES
The dollar remains at its highest level in 38 years against the yen, with traders worried about political developments in the United States while the Federal Reserve shows no sign of cutting rates.
In Asia, the yen fell by 0.11% to 161.63 yen per dollar, the Australian dollar fell by 0.3% to 0.6639 dollars.
The dollar was stable against a basket of benchmark currencies, while the euro lost 0.1% to $1.0727, and the pound sterling lost 0.1% to $1.2634.
OIL
Crude is up slightly and near a two-month high, supported by the latest US indicators suggesting input prices are falling in the US manufacturing sector, while Hurricane Beryl raises fears of a drop in offshore production.
Brent rose 0.23% to $86.8 per barrel, with US light crude (West Texas Intermediate, WTI) gaining 0.16% to $83.51.
KEY ECONOMIC INDICATORS ON THE AGENDA FOR JULY 2: COUNTRY GMT INDICATOR PERIOD CONSENSUS PREVIOUS EZ 09:00 Preliminary inflation June 2.5% 2.6% EZ 09:00 Unemployment June 6.4% 6.4% USA 14:00 May survey 7.910 million 8.059 million
JOLT job openings (Written by Corentin Chappron, edited by Kate Entringer)
