WALL STREET SHOULD OPEN IN RED
by Marc Angrand
PARIS (Reuters) – Wall Street is expected to open in the red and European stock markets reduce their progress mid-session on Wednesday, as lingering uncertainties over Russia’s will to ease the tension linked to Ukraine prompt investors to be cautious , as is awaiting the minutes of the last US Federal Reserve meeting.
Futures on the main New York indices, which were up at the start of the day, now signal a decline of 0.1% for the Dow Jones, 0.1% for the Standard & Poor’s 500 and 0 .03% for the Nasdaq.
In Paris, the CAC 40 gleans 0.05% to 6,983.39 points around 11:50 GMT after having gained up to 0.74% in the morning and in Frankfurt, the Dax advances by 0.08% while in London, the FTSE 100 yields 0.2%.
The EuroStoxx 50 index is up 0.14%, the FTSEurofirst 300 0.02% and the Stoxx 600 0.07%.
While Moscow claims to continue the withdrawal of part of the troops massed in recent months near the borders of Ukraine, NATO says it still has no proof of de-escalation; saying on the contrary that he had observed an increase in the number of Russian units en route to the border.
The caution of Westerners in the face of the signals sent by Russia is having an impact on investors’ appetite for risk, especially since the latest news on the inflation front, the other major concern at the moment, is mixed: the Price increases were less marked than expected in China, but they reached 5.5% over one year in the United Kingdom, their highest level for almost 40 years.
Investors will therefore be keeping a close eye on the US retail sales figures at 13:30 GMT, pending the minutes of the Fed’s January monetary policy meeting at 19:00 GMT.
“I expect the ‘minutes’ to reflect tight central bank action but that shouldn’t be a game-changer for markets, which have already priced in six rate hikes,” said senior analyst Craig Erlam. ‘OANDA.
VALUES IN EUROPE
In Europe, the rebound in oil and base metal prices is benefiting the European energy (+0.77%) and raw materials (+0.67%) sectors.
Conversely, the telecoms compartment (-1.39%) is weighed down by Ericsson’s fall of 13.82% after the discovery of accounting irregularities in its activities in Iraq which could be linked to acts of corruption. likely to have benefited the armed organization Islamic State (IS).
In the news of the results, Air Liquide gains 3.87% after showing its confidence in its ability to improve its margin excluding energy and FDJ takes 5.52% after raising its objectives for 2025.
CHANGES
Even fragile, the renewed appetite for risk disadvantages the dollar, which lost some ground against other major currencies (-0.19%), such as the euro, which rose to 1.1383.
But the greenback’s downside potential remains limited by the prospect of a Fed rate hike in a month’s time: all participants in Reuters’ monthly survey expect at least a quarter-point hike and the scenario of a half-point increase is gaining momentum.
RATE
Yields on US government bonds are currently stable, at 2.0347% for ten-year Treasury bills and 1.566% for two-year securities.
In Europe, that of the ten-year German Bund fell back to 0.299% after reaching a new high of more than three years at 0.331% at the start of the session, as investors’ attention turned to monetary policy issues to the detriment geopolitics.
OIL
Also influenced by the development of tensions around Ukraine, the oil market is regaining some of the ground lost the day before.
The price of a barrel of Brent is up by 1.16% to 94.36 dollars and that of American light crude (West Texas Intermediate, WTI) by 1.09% to 93.07 dollars.
They had lost 3.3% and 3.55% respectively on Tuesday after reaching their highest level since September 2014 the day before.
(Edited by Blandine Hénault)