Slight decline in sight in Europe with a new burst of results

Slight decline in sight in Europe with a new burst of results

Traders on the IG Index trading floor, London

Traders on the IG Index trading floor, London

by Claude Chendjou

PARIS (Reuters) – Major European stock markets are expected to edge slightly lower on Wednesday after rising sharply as investors are likely to take profit after a flurry of new corporate results and ahead of decisions by several major central banks. .

Index futures suggest a drop of 0.17% for the Paris CAC 40, 0.04% for the Frankfurt Dax, 0.23% for the London FTSE 100 and 0.28% for the EuroStoxx fifty.

The euphoria in equity markets has been fueled since Friday by expectations of a slowdown in interest rate hikes and better-than-expected corporate results that chased away fears about inflation.

The latest macroeconomic statistics from Europe and the US, which came in lower than expected, further reinforced this hope, causing bond yields to fall and risk appetite to return.

In this context, the Bank of Canada’s monetary policy statement, published at 14:00 GMT, could be a first test to gauge a possible change of course by the main central banks as Bank decisions are awaited. Central European (ECB). on Thursday and those of the US Federal Reserve (Fed) next week.

Markets continue to price in a 75 basis point hike in the three central banks’ benchmark rates, but some analysts believe the Fed could start to slow the rate of credit rises in December and the ECB next year.

As for financial publications, in Europe the results of Carrefour, Thales, Accor, Mercedes-Benz, BASF, Barclays and Heineken are expected, while in the United States Meta Platforms, Boeing, Ford and Kraft Heinz are expected.

Of the 129 S&P-500 companies that have already reported earnings, 74% beat earnings expectations, compared with a long-term average of 66.2%, according to Refinitiv data.

ON WALL STREET

The New York Stock Exchange closed sharply higher on Tuesday, boosted by the release of macroeconomic statistics that reinforced expectations of a possible slowdown in Fed rate hikes from December.

The Dow Jones Industrial Average gained 1.07%, or 337.12 points, to 31,836.74 points.

The broader S&P-500 gained 61.77 points, or 1.63%, to 3,859.11 points.

The Nasdaq Composite jumped 246.5 points (+2.25%) to 11,199.12 points.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index ended up 0.67% at 27,431.84 points and the broader Topix rose 0.58% to 1,918.21 points.

In China, the Shanghai SSE Composite gained 0.51% and the CSI 300 0.56%.

SPEED

The yield on the 10-year US Treasury bill appeared Wednesday at 4.06% after hitting a session low of 4.052% the day before, in response to the release of new statistics. Individual house prices in the US fell 0.9% on a seasonally adjusted basis in August and US consumer confidence deteriorated more than expected.

The 10-year German Bund yield held steady at 2.17% on Wednesday. The previous day it fell to a minimum since October 14 at 2.18%, losing around 15 basis points, compared to a maximum since August 2011 reached on Friday at 2.532%.

CHANGES

The dollar fell again on Wednesday, 0.11%, against the other major currencies after losing more than 1% on Tuesday in the session.

The euro advanced 0.1% to $0.9974.

The pound rose 0.03% to $1.1476 after rising sharply the day before to a nearly six-week high in reaction to the appointment of former British finance minister Rishi Sunak as prime minister.

The Japanese currency is trading at 147.87 yen to the dollar after falling to a 32-year low on Friday against the dollar at 151.94 to the dollar.

OIL

Oil prices fell this Wednesday, penalized by data from the American Petroleum Institute (API), the main federation of hydrocarbon manufacturers in the United States, which showed, according to sources, that crude oil inventories in the country increased by about 4.5 million of barrels in the week that ended. October 21.

Brent fell 1.03% to $92.56 a barrel and US light crude (West Texas Intermediate, WTI) fell 0.81% to $84.63.

(Written by Claude Chendjou, edited by Kate Entranger)

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