WALL STREET EXPECTS CONTINUED GROWTH IN PRODUCER PRICES
from Letitia Volga
PARIS (Reuters) – European stock markets were more cautious in mid-session on Thursday as Wall Street was expected to rally, still supported by signs of easing U.S. inflation, in anticipation of new economic data that could fuel debate over the evolution of the Federal Reserve (Fed. ). Futures signal a rise of 0.44% for the Dow Jones, 0.39% for the Standard & Poor’s-500 and 0.31% for the Nasdaq. In Paris, the CAC 40 was down 0.14% at 6,514.19 by 11:40 GMT. In Frankfurt, the Dax rose by 0.09%, and in London, the FTSE lost 0.43%.
The pan-European FTSEurofirst 300 index fell by 0.12%, the Eurozone EuroStoxx 50 index rose by 0.03% and the Stoxx 600 by 0.04%.
While lower-than-expected consumer prices in the United States were reassuring on Wednesday, several officials at the institution — from hawk Neil Kashkari to dove Mary Daley — left no doubt that the U.S. central bank will continue to tighten its monetary policy. policy until inflationary pressures subside for a long time.
But money markets are pricing in a less restrictive Fed bias next month than before the inflation data, with just over a 60% chance of a 50 basis point rate hike in September and about a 40% chance of a 75 basis point hike.
“For a growing number of traders, the next inflation report on September 13 will confirm the downward trend in price pressures,” said Edward Moya, an analyst at Oanda. “It’s too early to say the Fed will raise its rate by just half a point next month, but if inflation continues to fall, the Fed’s stance will reverse.”
The rest of the session will be enlivened by the publication at 12:30 of producer prices in the United States, which may shed another light on the evolution of inflation.
Walt Disney rose 7% in pre-opening Wall Street trading after the global entertainment giant announced Wednesday night that its streaming video platforms (Disney+, Hulu and ESPN+) have more subscribers than Netflix.
VALUES IN EUROPE
In Europe, Sanofi fell 9.50%, the biggest decliner in the CAC 40, on fears that lawsuits against Zantac in the United States would lead to costly settlements.
Valneva falls 2.65% as the French lab cut its annual revenue target due to a drop in orders for its COVID-19 vaccine. Insurance company Aegon gains 10.25% after raising its outlook for 2021-2023 working capital accumulation and free cash flow, maintained. better-than-expected operating profit in the second quarter.
Siemens erased its losses after losing 2.2% in the session in response to announcing a quarterly loss, the first in almost 12 years, due to the impairment of Siemens Energy and its exit from Russia.
Ten-year Treasury yields are stabilizing as several members of the Fed push for continued monetary tightening despite a slowdown in inflation in July. This is about 2.77% after the previous day’s session low of 2.674%.
In the European market, the Bund yield of the same maturity recovered two basis points to 0.906%, from 0.837% at Wednesday’s low.
The dollar continues to depreciate against a basket of other international currencies (-0.2%) in response to US inflation data.
The euro, in turn, rose by 0.34% to 1.0332 dollars.
Oil prices are rising after the International Energy Agency raised its forecast for oil demand growth this year as a sharp rise in gas prices prompted some consumers to turn to oil.
Brent rose by 0.73% to $98.11 per barrel, and US light oil (West Texas Intermediate, WTI) rose by 0.82% to $92.68.
KEY ECONOMIC INDICATORS ON THE AGENDA FOR AUGUST 11:
COUNTRY INDEX GMT PERIOD PREVIOUS CONSENSUS
USA 12:30 p.m. Week of unemployment claims 263,000 260,000
USA 12:30 Producer Price July +0.2% +1.1%
– over a year +10.4% +11.3%
(Letitia Volga, edited by Kate Entringer)