Former building of the Paris Stock Exchange
by Claude Chendjou
The main European scholarships are expected on Wednesday in the green after the publication of data showing both a resilience of the main economies and the need for central banks to remain accommodating but the geopolitical context should continue to limit the potential of gains.
According to the first indications available, the Parisian CAC 40 should gain 0.24% at the opening. The Dax in Frankfurt could advance by 0.40%, while the FTSE 100 in London should take 0.23%. The Eurostoxx 50 index is expected to increase by 0.32% and the Stoxx 600 up 0.33%.
Wall Street reached new heights on Tuesday, carried by a growing certainty that the American Federal Reserve (Fed) will reduce its interest rates next month.
The MSCI Monde index is progressing on Wednesday for the second session in a row and hit a record at 948.54 points.
The Japanese Nikkei, for its part, has crossed the 43,000 points and Ether, a cryptocurrency, has reached its highest level in almost four years, signs of the enthusiasm of investors.
In Japan, the “tankan” survey of the Bank of Japan showed that manufacturers were more confident about the economic situation after the signing of a trade agreement with the United States.
In Europe, the market will monitor inflation figures in Germany at 6:00 am on Wednesday at 6:00 am before economic statistics in the United Kingdom, euro zone and the United States on Thursday and Friday.
“It is obvious that almost all good news encourages investors to invest massively in the markets, in particular in technological actions, despite their high prices,” wrote in a Paco Chow note, financial advisor at Moomoo.
Enthusiasm on the economic front does not erase concerns on the geopolitical front.
Approaching the summit in Alaska, supposed to end the conflict between Russia and Ukraine, the heads of state and government of the European Union member (EU), with the exception of the Hungarian Prime Minister Viktor Orban, reaffirmed Tuesday the need for Ukraine to be able to choose his future.
The Ukrainian president, Volodimir Zelensky, is not invited to meet the American and Russian presidents Donald Trump and Vladimir Putin, which raises fears that Moscow will dictate the peace conditions unfavorable to Ukraine.
A WALL STREET
The New York Stock Exchange ended up on Tuesday, the S&P 500 and the NASDAQ touching records, after the publication of data in the United States indicating that inflation had increased in accordance with expectations in July, which should allow the Fed to lower its interest rates in September.
The Dow Jones index won 1.10%, or 483.52 points, at 44,458.61 points. The larger Standard & Poor’s 500 took 72.31 points, or 1.13% at 6,445.76 points. The Nasdaq Composite advanced on its side of 296.50 points, or 1.39% to 21,681.904 points.
The markets have read the figures on consumer prices (ICC) in the United States, which increased slightly in July but an underlying measure recorded its highest increase in six months, under the effect of American customs duties.
In Asia
On the Tokyo Stock Exchange, the Nikkei index is advancing 1.16% to 43,206.62 points, crossing the threshold of 43,000 points for the first in its history, supported by values like Renesas Electronics, Advantest or Sony Group. The broader Topix takes 0.85% at 3,092.84 points, ending towards a sixth consecutive session in the green, after having touched an unprecedented level at 3,097.94 points.
In China, the SSE Composite of Shanghai granted 0.39% and the CSI 300 increased 0.82%. Actions in Shanghai have reached a summit of more than three and a half years with a view to lowering Fed rates after the publication of American inflation figures.
Changes/Rate
The dollar weakens on Wednesday against a basket of reference currencies after the figures of American inflation. Traders are betting with a probability of 95% on a drop in Fed rates in five weeks.
The euro nibbles 0.03%, to 1.1677 dollars, while the pound sterling is exchanged at 1.3497 dollars (+0.03%).
The yield of American treasury bills at ten years is almost stable, at 4.2849%.
OIL
The oil market is stable before the publication at 8:00 am GMT of the AIE on petroleum monthly report. Investors also expect indices on American stocks in crude, while keeping an eye on Friday meeting between Donald Trump and Vladimir Putin.
Brent increased by 0.09% to 66.18 dollars per barrel and light American crude (West Texas Intermediate, WTI) from 0.03% to 63.19 dollars.
(Written by Claude Chendjou, edited by Augustin Turpin)
