Equity markets are expected to rise, all eyes are on the Federal Reserve. The Eurostoxx 50 opens at 3,738.11 points (-0.08%), the CAC 40 at 6,355.00 points (-0.23%), the DAX 40 at 13,917.27 points (-0.09% ), the FTSE 100 at 7,175.70 points (-0.25%), the SMI at 11,682.22 points (+0.03%), the AEX at 676.38 points (+0.31%), the BEL 20 at 3,961.16 points (-0.21%), the IBEX 35 at 8,236.10 points (+0.02%), the DJIA at 33,544.34 points (+1.82%), the Nasdaq at 12,948.62 points (+2.92%), the S&P 500 at 4,262.45 points (+2.14%) and the Nikkei 225 at 25,762.01 points (+1.64%).
Regarding exchange rates, the change from the close in New York indicates that EUR/USD opens at 1.0977 (+0.18%), EUR/JPY at 129.79 (+0.14%) and USD/JPY at 118.24 (-0.05%).
European equity markets are expected to open higher on Wednesday as investors await the monetary policy decision from the US Federal Reserve (Fed). At 7:35 am, the futures contract on the CAC 40 took 94 points, or 1.5%, according to data from the broker IG Markets. The contract on the DAX 40 gained 194 points, or 1.4%, and that on the FTSE 100 advanced by 79 points, or 1.1%. After two days of meetings, the Fed's monetary policy committee is expected to raise its short-term key rate by 0.25 percentage points in order to respond to inflation at its highest in 40 years in the United States. This would be the Fed's first rate hike since 2018 and, likely, the start of a new round of monetary tightening.
Central bankers will therefore have to agree on how to signal the likely path of rates in the coming months. The high level of inflation could force them to accelerate the process, even if they have signaled their desire to act with caution in order to avoid triggering a sharp correction in the financial markets. Investors will be watching Fed Chairman Jerome Powell's comments on the war between Russia and Ukraine, which is driving up commodity prices and affecting the outlook for growth and inflation.
Asian stock markets rebounded sharply on Wednesday, driven in particular by a very strong rebound in Chinese technology stocks which had been battered in recent days, investors fearing that many of them would be banned from listing in the United States. The Hang Seng index jumped 8.1% at the end of the session, while the Shanghai Composite took 3.7%. In Tokyo, the Nikkei index gained 1.6%. Wall Street also rallied on Monday, supported by lower oil prices and a lower-than-expected rise in US producer prices in February. The Dow Jones Index (DJIA) closed up 1.8% to 33,544.34 points, and the broader S&P 500 index gained 2.1% to 4,262.45 points. The Nasdaq Composite gained 2.9% to 12,948.62 points.
Yields on U.S. Treasury bonds rose to their highest levels since mid-2019 on Tuesday as the Fed's monetary policy committee meeting began and Russian and Ukrainian policymakers prepared to resume talks. On Wednesday morning, the yield on the Treasury bill continued to rise, standing at 2.167%, against 2.148% on Tuesday.
The euro rose against the dollar on Wednesday, thanks to a renewed appetite for risk ahead of the Fed's announcements. However, the war between Russia and Ukraine, questions about the evolution of the Chinese economy after new Covid-19 lockdowns and a restrictive tone from the Fed should allow the dollar to gain ground this week, estimates Westpac .
Oil prices rose on Wednesday morning, but light sweet crude (WTI) listed on the Nymex remained below $100 a barrel. In its monthly market report, OPEC did not revise its forecast for oil demand and supply or for global economic growth, saying the rapidly changing and uncertain situation in Ukraine was affecting its ability to accurately predict the profound consequences of the conflict on world energy markets. By 7:20 a.m., the May contract for Brent North Sea crude was up $2.65, or 2.7%, at $102.56 a barrel, while the April contract for light sweet crude (WTI) quoted at Nymex was taking $2.15, or 2.2%, $98.56 a barrel.