A trader works on the Frankfurt stock exchange
by Laetitia Volga
PARIS (Reuters) – Major European stock markets are expected to open higher Wednesday on Wall Street’s heels, though expectations of new US inflation data could limit gains.
Futures give an increase of 0.2% for the Paris CAC 40, 0.27% for the Frankfurt Dax, 0.18% for the London FTSE and 0.25% for the EuroStoxx 50.
These indices closed lower Wednesday on profit taking, but the higher close in US markets should give European equities a boost.
As investors eagerly awaited Federal Reserve Chairman Jerome Powell’s first speech of the year to a meeting of central bankers in Sweden, his lack of commentary on the US institution’s monetary policy was met with relief.
Investors feared fresh “hawkish” comments from him after two Fed officials earlier this week suggested rates might be raised above 5% for a while to stem inflation.
Markets are now focused on Thursday’s release of the December US consumer price index, which should show a more measured pace of inflation.
Most traders expect the Fed to decide at its February meeting to raise rates by 25 basis points.
The week also marks the start of earnings season for S&P-500 companies, with major US banks earnings on Friday. Analysts expect quarterly earnings to decline 2.2% year over year, according to IBES data from Refinitiv.
VALUES TO FOLLOW:
WALL STREET
The New York Stocks closed higher on Tuesday, relieved that Jerome Powell refrained from commenting on rates.
The Dow Jones Index gained 0.56%, or 186.45 points, to 33,704.10 points, the S&P-500 gained 27.16 points, or 0.70%, to 3,919.25 points and the Nasdaq Composite advanced 106.98 points (1.01%) to 10,742.63 points.
The “futures” on the indices suggest for the moment an opening close to equilibrium.
IN ASIA
In Tokyo, the Nikkei ended the day up 1.03%, the highest in two weeks, led by industrial robotics group Yasukawa Electric (+6.26%) after announcing good results.
In China, the CSI 300 (-0.19%) and the Shanghai SSE Composite (-0.24%) fell after several sessions in the positive.
EXCHANGES/FEES
The dollar is stable against a basket of reference currencies and the euro is trading around 1.0745 dollars (+0.1%).
In the bond market, the yield on 10-year US Treasuries fell just under 3.6%. Its German equivalent yields about three points around 2.27%
THE OIL
Oil prices erase yesterday’s gains after the American Petroleum Institute (API) reported an unexpected 14.9 million barrel increase in US crude stockpiles last week, adding to demand concerns.
Brent crude fell 0.74% to $79.51 a barrel and US light crude (West Texas Intermediate, WTI) lost 0.87% to $74.47.
The Energy Information Administration (EIA) will release its inventory data at 15:30 GMT.
(edited by Bertrand Boucey and Kate Entringer)