Rising on the horizon in Europe ahead of the Fed's big meeting
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Rising on the horizon in Europe ahead of the Fed’s big meeting

A trader working on the Frankfurt Stock Exchange

A trader working on the Frankfurt Stock Exchange

PARIS (Reuters) – Major European stock markets are expected to rise on Wednesday as hopes for an easing of health restrictions in China continued to support risk appetite, although pending Federal Reserve decisions are likely to weigh.

Index futures point to a rise of 0.33% for the CAC 40 in Paris, 0.28% for the Dax in Frankfurt, 0.19% for the FTSE 100 in London and 0.38% for the EuroStoxx 50.

The CAC 40 was already up nearly 1% on Tuesday and posted its best close since September 12.

The Fed is due to announce at 6:00 pm GMT the decisions of the Federal Open Market Committee, its Monetary Policy Committee, and its Chairman Jerome Powell, who will hold a press conference half an hour later.

Markets have already largely integrated the premise of a three-quarters point rate hike, which would be the fourth in many meetings and bring the “fed funds” target to 3.75%-4%.

But uncertainty remains high for the future as a real-time FedWatch meter indicates a probability of around 45% for a 50 basis point rise in December. So the Fed Chairman’s statements will be studied very carefully in the hope of finding new evidence.

For John Blassard, director of Mirabaud Securities, investors will have “just one question in mind: Will Jerome Powell signal any pauses for the next rate hike?”

Meanwhile, European investors will follow the final results of S&P Global PMI surveys on the manufacturing sector in the eurozone in the morning, after the US ISM index, which reflects growth at its lowest levels in nearly two and a half years, and at 12. 15 GMT ADP survey on US private sector employment.

In Germany, exports fell by an unexpected 0.5% in September and imports fell by 2.3%, which was more than expected.

The values ​​to be followed:

On Wall Street

The New York Stock Exchange suffered, on Tuesday, the second consecutive decline after the release of indicators showing that demand in the labor market is still strong, fading hopes of a slowdown in the monetary tightening of the Federal Reserve (the Federal Reserve) in the coming months.

The Dow Jones fell 0.24%, or 79.75 points, to 32653.2 points, the Standard & Poor’s 500 lost 15.88 points, or 0.41%, to 3856.10 points, and the Nasdaq Composite fell 97.3 points (-0.89%) to 10,890.85.

The “Shakes” (Job Opportunity and Employment Turnover Survey) survey conducted by the Department of Labor showed that the number of job vacancies rose in September in the United States, indicating that demand in the labor market remains strong despite the price hikes in recent months.

Among the major growth stocks sensitive to price expectations; Amazon and Apple shares fell 5.52% and 1.75%, respectively.

On the upside, Uber Technologies jumped 11.97% as the market welcomed its expectations for the fourth quarter.

Futures are pointing to a slightly higher open at the moment.

In Asia

On the Tokyo Stock Exchange, the Nikkei closed down by a symbolic 0.06%, as many participants refrained from taking new positions ahead of the Fed’s announcements, especially since Japanese markets will remain closed. The archipelago.

However, Sony stood out, gaining 7.01% after raising its annual operating profit forecast by 4.5%.

In China, the Shanghai SSE Composite Index is up 1.15% and the CSI 300 Index is up 1.2%, amplifying the recovery that began Tuesday by continuing to bet on easing health restrictions, a factor added to by the statements of the People’s Bank officials. China and the Hong Kong Financial Commission on further reform and support the economy. In Hong Kong, the Hang Seng Index is up 2.41%.

the changes

The dollar lost ground against the other major currencies (-0.06%), with currency traders remaining on the sidelines awaiting US central bank data.

On Tuesday, it rose in a session to its highest level in a week.

The euro settled against the dollar at 0.9872 while the yen outperformed its rise by 0.65% to 147.31 per dollar.

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The 10-year US Treasury yield in Asia was almost unchanged at 4.0547% and maintained the previous day’s rally in response to the JOLTS survey and an unexpected rebound in US construction spending.

These numbers confirmed expectations of a peak in the federal funds rate at 5% or more next spring and for several months.

In Europe, the German 10-year-old rose to 2.139% in early trading.

oil

The oil market is on the rise after figures from the American Petroleum Institute (API) that show, according to market sources, an unexpected 6.5 million barrel decline in US crude oil inventories.

Brent rose 0.93 percent to $ 95.53 a barrel, and US light crude (West Texas Intermediate, West Texas Intermediate) 1.15 percent to $ 89.39. Both actually gained about 2% on Tuesday amid the dollar’s decline and unverified rumors of easing health restrictions in China.

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