Wall Street Expected a Cautious Rise Ahead of US Inflation – 10/08/2022 at 13:01


Wall Street expected to be cautious ahead of US inflation

by Laetitia Volga

PARIS (Reuters) – Wall Street is expected to rebound slightly at the open and European stock markets will move largely unchanged mid-session on Wednesday, awaiting announcements of inflation figures in the United States, which is important for short-term financial developments. Markets and monetary policy of the US Federal Reserve.

Futures point to a 0.23% increase for the Dow Jones and Standard & Poor’s-500 Index and 0.26% for the Nasdaq the day after the session in the red, which was marked by a wait-and-see attitude and a decline in the technology sector after disappointing forecasts from Micron

In Paris, the CAC 40 (-0.01%) settled at 6489.1 at 10:38 GMT. In Frankfurt, the Dax advanced 0.22% and in London, the FTSE is up 0.08%.

The FTSEurofirst 300 Pan-European Index, the Eurozone EuroStoxx 50 Index and the Stoxx 600 Index rose 0.03%.

The process of risk was very limited in August due to the upcoming release of US consumer prices for July at 12:30 GMT, which could revive or soften expectations for the next big Fed rate hike. Month.

According to the Reuters consensus, the consumer price index is expected to rise by 0.2% in one month and by 8.7% on an annual basis, which may constitute a slowdown compared to the previous month, but the core index, which excludes energy and food, could accelerate to 6.1% within one year .

“Even if inflation eases a bit, the Fed will look to go ahead with a 75 basis point hike next month because it is confident that the labor market can sustain another significant rally,” said David Madden, analyst at Equiti Capital. “We are still far from the (Fed) 2% inflation target.”

Wall Street values ​​to be followed

values ​​in Europe

In Europe, the defensive sectors were among the biggest declines: the health sector losing 0.59% and food and beverages 0.42%.

On the Amsterdam Stock Exchange, distributor Ahold Delhaize rose 7.76% after again raising its forecast for annual earnings per share, and ABN Amro (-0.63%) went into the red after taking as much as 4.6% in reaction to a better-than-expected quarter. annual. Results, liberalization of provisions that offset the increase in costs.

Tour operator TUI lost 3.18% in Frankfurt after posting a quarterly loss, as a result of additional costs from air traffic disruption in Europe.

RATES The yield on US Treasuries drops as inflation figures approach, erasing some of its gains on Tuesday: the 10-year fell to 2.7864%, the two-year to 3.2596%.

In the European market, the German 10-year yield lost nearly three basis points and settled at 0.988% as Eurozone investors now believe a half-point rate hike is certain. Central Europe in September, Refinitiv data shows.

the changes

After Treasury yields fell, the dollar lost 0.21% against a basket of reference currencies. DXY>, which allowed the euro to rise slightly, to 1.0232.

oil

Oil prices eased slightly ahead of US inflation and after the American Petroleum Institute (API) published a larger-than-expected increase in US crude oil inventories last week.

Brent lost 0.97 percent to $95.38 a barrel and US light crude (West Texas Intermediate, West Texas Intermediate) 1.01 percent to $89.59.

(Written by Letitia Volga, Edited by Jan-Stefan Bruce)

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