(Paris) The world stock markets fluctuated with caution on Tuesday before an imminent speech by Jerome Powell, the president of the American Federal Reserve (Fed), whose remarks are scrutinized by investors, in expectation as to the evolution of the key rates.
Wall Street was treading water: around 9:55 a.m. (Eastern time), the Dow Jones (+0.02%), the S&P 500 (-0.03%) and the NASDAQ (+0.09%) were moving around their levels the day before.
The European stock markets did not show a clear trend either: Frankfurt yielded 0.18%, Milan 0.10%, while Paris (+0.02%) and London (+0.08%) were in equilibrium. .
All investors’ attention is directed towards the hearing before the US Senate of the head of the US Federal Reserve (Fed).
“Everyone expects Fed Chairman Jerome Powell to sing his best refrain ‘we still have work’ and ‘higher for longer'” on policy rates, said Edward Moya, analyst at Oanda .
A year after the start of monetary policy tightening and two weeks before the next meeting, the fight against inflation is far from won by the Fed. The latest figures showed that inflation is no longer slowing as fast as at the end of 2022.
“It is probably wiser for Mr. Powell to keep the same tone as in his previous interventions, but if the monetary policy committee really considers a 0.5 percentage point hike” in key rates, harder than the consensus 0.25 percentage point hitherto considered by the market, “it’s a good opportunity to prepare the ground,” said Craig Erlam, analyst at Oanda.
Investors have already had to get used to the idea that the monetary tightening cycle is not yet over, which translates into a sharp rise in the cost of government borrowing. On Tuesday, however, they receded from their peak reached the day before.
But so far the equity markets have not been affected by this change of vision, especially in Europe where the indices are breaking records, such as the CAC 40 in Paris on Monday, or are close to it.
In the euro zone, consumer expectations about inflation have “significantly” declined, according to the European Central Bank, which supports calls for a slowdown in the pace of its rate hikes. Three-year inflation expectations plunged to 2.5% in January from 3% in December, according to the ECB’s monthly survey.
For its part, the Australian Central Bank raised its main interest rate for the tenth time in a row on Tuesday, now at its highest level since mid-2012 (3.6%).
Wincanto blocked by customs
The British logistics solutions company Wincanton lost 26.19% in London after announcing the loss of a contract with the British government’s customs services.
Duty-free operator Dufry, which is preparing to merge with Italy’s Autogrill, was up 3.31% in Zurich after announcing a return to profit in 2022 thanks to the sharp rebound in tourism since the lifting of health restrictions .
Traton weighs in
The heavy goods vehicle manufacturer Traton (+5.83%), a subsidiary of Volkswagen (-0.06%), forecasts an increase in sales of 5 to 15% this year after an already favorable year 2022.
The rival Daimler-Truck (+1.50%) is also wanted.
On the side of currencies and oil
Oil prices fell slightly before the hearing of Fed boss Jerome Powell, between a more tepid economic recovery than expected in China and a potential breakthrough in discussions around the Iranian nuclear.
Around 9:50 a.m. (Eastern time), a barrel of Brent from the North Sea for delivery in May lost 0.61%, to 85.65 dollars.
The barrel of American West Texas Intermediate (WTI), for delivery in April, yielded 0.67%, to 79.95 dollars.
The euro yielded 0.36% against the dollar, at 1.0643 dollars and the pound 0.41% at 1.1976 dollars.