Stocks set to be hesitant at the open, central banks remain in focus

The Eurostoxx 50 climbed 4,120.56 points or +0.83% , the CAC 40 was at 7,009.25 points +0.83% , the DAX 40 at 15,206.64 points +0.71% , the FTSE 100 at 7,573.47 points +0.76% , the SMI at 12,193.81 points +0.44% , the AEX at 755.69 points +1.14% , the BEL 20 at 4,039.15 points +0.72% , the IBEX 35 at 8,589.30 points -1.15%

The DJIA stands at 35,091.13 points 0.00% , the Nasdaq at 14,015.67 points -0.58% , the S&P 500 at 4,483.87 points -0.37% , the Nikkei 225 is at 27,284.52 points +0.13%

Exchange rate at 06:50

Change from the close in New York

EUR/USD is trading at 1.1420 -0.20% , EUR/JPY at 131.85 +0.11% and USD/JPY at 115.46 +0.31%

BNP Paribas and Orpea publish their fourth quarter and full year 2021 results on Tuesday. Getlink presents its January traffic figures.
On the macroeconomic front, investors are awaiting the figures for foreign trade in December, as well as the latest economic report from the National Institute of Statistics and Economic Studies (Insee), which will reveal on this occasion its economic projections until June 2022.

SHARES

European equity markets are expected to be little changed at the open on Tuesday, as investors watch for any signs that global central banks will try to rein in inflation by accelerating the withdrawal of their support measures.
Around 7:40 a.m., the CAC 40 futures contract gained 9 points, or 0.1%, according to data from broker IG Markets. The contract on the DAX 40 gained 2 points, or 0.01%, and that on the FTSE 100 rose by 18 points, or 0.2%.

Investors want to know how quickly central banks in the United States, Europe and elsewhere will raise historically low interest rates and withdraw other support measures in order to contain inflation that has reached its highest level in several decades.
On Monday, European Central Bank (ECB) President Christine Lagarde insisted that risks to the inflation outlook were on the upside, particularly in the near term, while stressing that over the medium term, inflation expectations were stabilizing towards the ECB's 2% target.

Speaking to the European Parliament's Economic and Monetary Affairs Committee, the official also reiterated that there would be "no rate hikes until net asset purchases come to an end."

"There is a definite sequence between the end of our net asset purchases and the date of a rate hike", she recalled, stressing that "three conditions will have to be met before the Board of Governors feels confident enough to raise our policy rate".
"These three conditions constitute safeguards against a premature rise in interest rates", hammered the president of the ECB, specifying that any adjustment of the monetary policy would be "gradual".
In its latest monetary policy statements, the ECB listed the preconditions for a rate hike in these terms: "The Governing Council expects the key ECB interest rates to remain at their current levels or at higher levels low until it finds that inflation reaches 2% well before the end of its projection horizon and durably over the rest of this horizon, and that it judges the progress of underlying inflation sufficient to be compatible with a stabilization of inflation at 2% in the medium term".
Faced with "surprisingly high" inflation, the Governing Council "will carefully study" the new economic projections of the ECB teams at its next meeting, scheduled for March. These data "will allow the Governing Council to better assess the implications of the surprisingly high inflation figures in December and January on the medium-term outlook", indicated Christine Lagarde.

The prospect of tighter monetary policy “triggered asset markets lower,” Tan Boon Heng of Mizuho Bank said in a report.
In the United States, the New York Stock Exchange ended in scattered order on Monday amid tensions on bond yields before the release of inflation figures at the end of the week. The Dow Jones Index (DJIA) ended almost unchanged at 35,091 points. The broader S&P 500 index lost 0.4% to 4,483.87 points. The Nasdaq Composite fell 0.6% to 14,015.67 points.
Investors were cautious before the publication on Thursday of inflation figures in the United States in January.
Asian markets present a mixed picture on Tuesday. While the Nikkei index gained 0.1% in Tokyo, the Hong Kong Stock Exchange's Hang Seng lost 1.1% and the Shanghai Composite gained 0.2% at the end of the session.
The United States announced on Monday the lifting of customs duties inherited from the Trump administration on Japanese steel imports, thus removing a subject of friction between the two allies. The move follows a similar agreement with the European Union in October and comes as the Biden administration steps up efforts to strengthen economic ties with countries in the Asia-Pacific region to counter China's growing influence. .

OBLIGATIONS
Yields on US Treasury bonds continued to rise on Tuesday morning, still buoyed by robust US jobs data in January and the prospect of monetary policy tightening by the Federal Reserve (Fed). The yield on the ten-year bond, the market benchmark, stood at 1.947% at 7:35 a.m., compared to 1.93% on Friday and 1.825% on Thursday at the close.

One of the highlights of the monthly U.S. jobs report is the higher-than-expected rise in the average hourly wage, suggesting that inflationary pressures may not ease as much as investors expect .
Rising long-maturity bond yields signal not only that investors anticipate a rapid pace of interest rate hikes from the Federal Reserve (Fed), but also that they are increasingly confident that the economy can endure such a pace.

CHANGES

The euro fell against the dollar on Tuesday morning. The greenback remains supported by the prospect of interest rates rising faster in the United States than in other countries, indicates Bank of America.
Risk appetite in the foreign exchange market could, however, be helped by the meeting between the French and Russian presidents over Ukraine, with Emmanuel Macron saying that Vladimir Putin had said he was ready to explore ways to appease the tensions.
Diplomacy appears to be on and markets appear ready to price in that a Russian invasion of Ukraine is a tail risk and not a base case scenario, NAB reports.

OIL

Oil prices rose slightly on Tuesday morning, driven by favorable signals in the market.
Last weekend, Saudi Arabia raised prices for customers in Asia, the United States and Europe, while the unexpected closure of a US refinery and other sites in the Gulf of Mexico brought spot gasoline prices in Houston at their highest level in two months, ANZ said.
At 7:25 a.m., April's North Sea Brent contract was up 1 cent to $92.70 a barrel. The Nymex-listed light sweet crude (WTI) March contract took 7 cents to $91.39 a barrel.