Euro and US dollar exchange rates are displayed on an electronic board in Sao Paulo.
by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected to rise again on Wednesday at the opening, still driven by hopes of the end of monetary tightening in the United States in view of an indicator showing the slowdown in the labor market. .
According to the first indications available, the Parisian CAC 40 should gain 0.21% at the opening, the Dax in Frankfurt 0.09% and the FTSE 100 in London 0.27%. The EuroStoxx 50 index is expected to rise by 0.14%.
Pending the publication of the official monthly report on employment in the United States on Friday, the Jolts survey showed on Tuesday a decline for the third consecutive month in job offers in the country to 8.827 million in July, the highest level low since March 2021.
“Bad news is good news, as the data supports the hypothesis of a faster end to the Fed’s rate hike cycle despite recent restrictive rhetoric from its chairman, Jerome Powell,” Tina Teng wrote in a note. , Market Analyst at CMC Markets.
Investors now want to believe that the decline in the labor market will be confirmed by the ADP survey, which is due for publication at 12:15 GMT, while the dollar and bond yields, which fell to a three-week low, are under pressure.
In fact, the probability of a status quo on Fed rates in September is now 89%, according to CME Group’s Fedwatch Barometer.
In the day’s indicators, investors will also watch the second estimate of the gross domestic product (GDP) of the United States for the second quarter, expected up 2.4%, as well as the PCE price index.
In Europe, the first monthly consumer price figures are also expected, especially in Germany.
AT WALL STREET
The New York Stock Exchange ended sharply higher on Tuesday, driven by Tesla, Nvidia and other high-growth stocks amid rate optimism.
The Dow Jones index gained 0.85% to 34,852.67 points.
The broader S&P-500 rose 1.45% to 4,497.63 points, to a peak in more than two weeks.
“Investors are thinking, maybe interest rate hikes are behind us, so let’s buy stocks,” commented Sam Stovall, chief strategist at CFRA Research.
The yield on ten-year US Treasuries fell to 4.11%, while those on two years fell back below the 5% threshold around which they had been established for several sessions, which supported the growth values.
IN ASIA
At the Tokyo Stock Exchange, the Nikkei index ended on a gain of 0.25% to 32,308.39 points and the Topix, broader, took 0.43% to 2,313.38 points.
The MSCI grouping together the values of Asia and the Pacific (excluding Japan) rose 0.86%, the third consecutive session in the green, which brings the index to a two-week high.
In China, the Shanghai SSE Composite gained 0.01% and the CSI 300 was practically stable (-0.06%).
VALUES TO FOLLOW IN EUROPE:
EXCHANGES/RATES
The dollar index measuring the swings of the greenback against a basket of benchmark currencies posted its biggest drop in a month and a half on Wednesday, with traders betting that US jobs data will push the Fed not to touch its interest rates.
The euro is trading at $1.0873.
Yields on ten-year and two-year US Treasuries rose slightly on Wednesday, to 4.1452% and 4.9212% respectively after their sharp falls the day before.
The yields of the German Bund for these two maturities are displayed respectively at 2.535% (stable) and 3.085% (+4 basis points).
OIL
The oil market is supported by the sharp drop in crude inventories in the United States last week and concerns related to Hurricane Idalia, which hit the Gulf of Mexico, east of the main production sites of American oil and natural gas.
Brent gained 0.32% to 85.76 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.44% to 81.52 dollars.
(Written by Claude Chendjou, edited by Tangi Salaün)