European equity markets are expected to rise sharply after the Fed and before the ECB. The Eurostoxx 50 opens at 4,159.68 points (+0.37%), the CAC 40 at 6,927.63 points (+0.47%), the DAX 40 at 15,476.35 points (+0.15% ), the FTSE 100 at 7,170.75 points (-0.66%), the SMI at 12,530.95 points (+0.96%), the AEX at 775.46 points (-0.04%), the BEL 20 at 4,122.01 points (+0.01%), IBEX 35 at 8,275.00 points (-1.24%), DJIA at 35,927.43 points (+1.08%), Nasdaq at 15,565.58 points (+2.15%), the S&P 500 at 4,709.85 points (+1.63%) and the Nikkei 225 at 29,066.32 points (+2.13%).
With regard to exchange rates, the variation compared to the closing in New York, EUR/USD at 1.1288 (-0.04%), EUR/JPY at 128.83 (+0, 09%) and USD/JPY at 114.16 (+0.10%).
Investors await the first estimate of the PMI indices for the manufacturing and services sectors in December on Thursday. According to economists polled by the Wall Street Journal, growth in these two sectors is expected to slow slightly. The manufacturing PMI is expected at 55.5 in December after 55.9 in November, and that of services is expected at 56.5 against 57.4.
European equity markets are expected to rise sharply Thursday at the opening, welcoming, like Wall Street before them, the tightening of monetary policy by the Federal Reserve (Fed) US to counter the acceleration of inflation. The trend could however change during the day, investors are now awaiting announcements from the European Central Bank (ECB), which should for its part put an end to the emergency measures adopted at the start of the health crisis. At 7:40 a.m., the CAC 40 futures contract jumped 122 points, or 1.8%, according to data from broker IG Markets. The DAX 40 contract gained 226 points, or 1.5%, and the FTSE 100 contract gained 85 points, or 1.2%. The Fed on Wednesday showed its determination to fight inflation by eliminating its measures to support the economy more quickly than expected and by saying that it is ready to raise its key rates three times next year.
Wall Street ended sharply higher on Wednesday. The Dow Jones Index (DJIA) gained 1.1% to 35,927.56 points. The broader S&P 500 index gained 1.6% to 4,709.84 points. The Nasdaq Composite rose 2.2% to 15,565.58 points. The ECB is expected to announce the end of its Pandemic Emergency Purchase Program (PEPP) next March, a measure its president, Christine Lagarde, has been preparing investors for for several months. In order to avoid too sudden an impact for the markets, investors are however anticipating either an increase in the volume of the regular asset purchase program (APP), currently of 20 billion euros per month, or the creation of a transition device, of a limited duration and more flexible than the APP. In Asia, the markets presented a mixed picture on Thursday. If the Nikkei index gained 2.1% in Tokyo, driven by the announcements of the Fed, the Hang Seng of the Hong Kong Stock Exchange fell by 0.2% at the end of the session. According to KGI Securities, investors fear that the United States will add new Chinese companies to its blacklist. The Shanghai Composite index, for its part, was supported by the anticipation of new measures to support the economy in China and rose by 0.6%.
Yields on US Treasury bonds were little changed on Thursday morning, after rising on Wednesday. At 7:40 a.m., the yield on the ten-year Treasury bill, the market benchmark, stood at 1.457%, as on Wednesday evening. The perceived probability of at least two 25 basis point rate hikes stood at 89%, down from 87% earlier in the day, according to data from CME Group. The probability of three rate hikes stood at 66%, down from 62% before the Fed announcements.
The euro changed little against the dollar on Thursday morning, after recovering sharply on Wednesday evening in response to the Fed's announcements. According to Westpac, the rebound in risk appetite suggests that markets were ready for the accelerated pace of withdrawal from asset purchases and the three interest rate hikes anticipated by the monetary policy committee for 2022.
Oil prices rose Thursday morning, supported by a renewed appetite for risk after the announcements of the Fed. As of 7:35 a.m., the February North Sea Brent contract was up 76 cents, at $74.64 a barrel. The Nymex-listed light sweet crude (WTI) January contract was up 84 cents to $71.71 a barrel.