2023-09-19 05:27:39
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European stock markets hesitate before several monetary policy meetings
*The Federal Reserve is expected on Wednesday
* The dollar remains near its highest in six months
* US yields near their highest since 2007
PARIS, September 19 (Archyde.com) – The main European stock markets are expected to be mixed at the opening on Tuesday in a wait-and-see context before several central bank meetings this week, including the Federal Reserve on Wednesday, the Bank of England on Thursday and the Bank of Japan Friday.
According to initial indications, the Parisian CAC 40 would fall by 0.21% at the opening. Futures contracts on the FTSE in London, the Dax in Frankfurt, and the EuroStoxx 50 suggest an opening without a marked trend.
The week is rich in monetary news, since six central banks from developed economies will meet, accompanied by many emerging central banks.
The Fed will steal the spotlight: if the markets are convinced that the central bank will not tighten its rates in September, the rest of the trajectory of American monetary policy is more uncertain.
At least one new rate increase would be necessary to bring inflation under control before the rate peak is reached, according to the dot plot and market expectations, especially as the resistance of the American economy makes run the risk of a resumption of inflation.
The labor market is, however, starting to show signs of softening, while the dynamic of disinflation is underway, as confirmed by the latest inflation figures for August.
“The Fed is clearly eager to act more cautiously as it seeks to better understand how the economy is adjusting to higher interest rates, (and) appears increasingly optimistic about the possibility of a landing in softness,” notes James McCann, deputy chief economist at abrdn.
“However, it is certain that there is still some way to go before the Fed can be certain that inflation returns sustainably to its target, (which) pushes back the idea that a pause in September signals the end of the cycle rate increase.”
Adding to the busy news, final Eurozone inflation is expected on Tuesday, while UK inflation will be released on Wednesday and preliminary Eurozone PMI indicators for September will be revealed on Friday.
VALUES TO FOLLOW:
A WALL STREET
The New York Stock Exchange ended very slightly higher on Monday, in a wait-and-see context, on the eve of the start of the Fed meeting which should announce the maintenance of interest rates at their current level.
The Dow Jones index gained 0.02%, or 6.06 points, to 34,624.30 points. The broader S&P-500 gained 3.21 points, or 0.07%, to 4,453.53 points. The Nasdaq Composite advanced 1.90 points (0.01%) to 13,710.24 points.
IN ASIA
Japanese markets are suffering, penalized by sales of semiconductor-related stocks after TSMC asked its suppliers to postpone their deliveries, according to Archyde.com. The Nikkei lost 1.2% to 33,129.23 points, the Topix falling 0.38% to 2,419.05 points.
Advantest, manufacturer of chip test equipment, lost 4.03% while chip manufacturer Renesas Electronics lost 4.82%.
Real estate turmoil continues to weigh on Chinese stocks, even as developer Country Garden obtained a grace period from its creditors for the repayment of a domestic currency bond. The Shanghai SSE Composite is stable, like the Hong Kong Hang Seng index, while the CSI 300 declines by 0.23%.
CHANGES
Foreign exchange markets are calm ahead of a busy week, with central banks overseeing five of the ten most traded currencies meeting in the coming days.
The dollar fell 0.04% against a basket of reference currencies but remains close to its highest level for six months. The euro lost 0.09% to $1.068, while the pound sterling lost 0.04% to $1.2377.
In Asia, the yen lost 0.09% to 147.74 yen per dollar, while the Australian dollar gained 0.06% to 0.6438 dollars.
RATE
US rates are stable in a wait-and-see context but remain close to their 15-year highs reached last August.
The ten-year Treasury yield fell by one basis point to 4.3086%, close to its highest level since 2007 reached at the end of August, at 4.366%, while the two-year rate lost 1.2 bp to 5.0517%.
OIL
Oil continues its progression after three consecutive sessions of increase, the low production of American shale oil raising fears of a persistent imbalance between supply and demand.
Brent advanced 0.64% to $95.03 per barrel, with American light crude (West Texas Intermediate, WTI) gaining 1.02% to $92.41.
MAIN ECONOMIC INDICATORS ON THE AGENDA OF SEPTEMBER 19 COUNTRY GMT INDICATOR PERIOD PREVIOUS CONSENSUS EZ 09:00 Consumer prices HICP August +0.6% -0.1%* (definitive) – over one year +5.3% +5, 3%* *first estimate
(edited by Bertrand Boucey)
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