With equities expected to fall, the market fears an accelerated monetary tightening in the USA. The Eurostoxx 50 opens at 4,257.82 points (-1.03%), the CAC 40 at 7,133.83 points (-0.94%), the DAX 40 at 15,772.56 points (-1.01% ), the FTSE 100 at 7,563.55 points (-0.63%), the SMI at 12,529.56 points (-0.82%), the AEX at 769.70 points (-1.49%), the BEL 20 at 4,219.86 points (-0.70%), IBEX 35 at 8,781.60 points (-0.65%), DJIA at 35,368.47 points (-1.51%), Nasdaq at 14,506.90 points (-2.60%), the S&P 500 at 4,577.11 points (-1.84%) and the Nikkei 225 at 27,467.23 points down -2.80%.

Regarding exchange rates, the variation compared to the close in New York, the EUR/USD opens at 1.1400 (-0.07%), the EUR/JPY at 130.85 ( +0.06%) and USD/JPY at 114.79 (+0.14%).

European equity markets are expected to continue their decline on Wednesday, with bond yields still rising and investors fearing a faster and bigger than expected hike in interest rates from the Federal Reserve (Fed). At 7:45 a.m., the CAC 40 futures contract lost 36 points, or 0.5%, according to data from broker IG Markets. The DAX 40 contract was down 94 points, or 0.6%, and the FTSE 100 contract was down 36 points, or 0.5%. Markets are wondering about the possibility that the Fed, which is preparing to tighten monetary policy to contain inflation, will raise the federal funds rate by 50 basis points in March

In this context, Wall Street ended sharply lower on Tuesday, weighed down by technology stocks after the new rise in bond rates while investors are also watching the surge in oil prices. The Dow Jones Index (DJIA) fell 1.5% to 35,368.47 points, and the broader S&P 500 index fell 1.8% to 4,577.11 points. The Nasdaq Composite fell 2.6% to 14,506.90 points. In Asia, the markets are also moving in the red on Wednesday. The Hang Seng of the Hong Kong Stock Exchange yielded 0.4% at the end of the session and the Shanghai Composite index lost 0.5%. The Nikkei index closed down 2.8%, penalized in particular by the prospect of new restrictive measures in Japan in order to fight against a new wave of Covid-19.

Yields on U.S. Treasury bonds continued to rise on Wednesday, after hitting near two-year highs on Tuesday as investors priced in the risk that the Federal Reserve (Fed) could hike interest rates by half -percentage point in March. At 7:45 a.m., the rate of the two-year Treasury bond, more sensitive to expectations of changes in Fed interest rates, was trading at 1.059%, against 1.047% on Tuesday evening. The yield on the ten-year title stood at 1.873%, compared to 1.876% on Tuesday evening. It is moving at its highest level since January 2020. On Tuesday evening, the ten-year Bund rate ended at -0.017%.

The euro rose against the dollar on Wednesday morning. Around 7:45 a.m., the single currency was trading at $1.1337. According to Trading Central's technical analysis, the euro/dollar pair remains trending lower and is bounded by its descending 20-day moving average. The RSI (“Relative Strength Index”), an indicator for measuring market momentum, remains weak at levels around 30, indicating a lack of momentum for the pair. The main resistance has been lowered at 1.1360. If it fails to return to this level, the euro/dollar pair should show a more marked decline towards 1.1300, then 1.1280.

Oil prices continued to rise on Wednesday morning as geopolitical tensions remained in focus after an attack on oil facilities in Abu Dhabi, United Arab Emirates, claimed by pro-Iranian Houthi rebels from Yemen. At 7:30 a.m., the March Brent contract was up 46 cents, at $87.89 a barrel. The Nymex-listed light sweet crude (WTI) February contract took 71 cents to $86.14 a barrel.