* Wall Street could gain up to 0.03% at the open
* CAC 40 loses 0.06% and Stoxx 600 nibbles 0.01%
*Release at 12:30 GMT by PPI in the US
* An intervention by the president of the Fed was also expected
by Claude Chendjou
PARIS, May 14 (Reuters) – Wall Street is expected to open largely unchanged on Tuesday, with European shares also largely flat mid-session while markets still await U.S. inflation indicators.
New York index futures signal that Wall Street opens 0.03% for the Dow Jones and 0.01% for the Standard & Poor’s 500, while the Nasdaq could fall 0.01%.
In Paris, the CAC 40 fell 0.06% to 8,204.32 points around 10:50 GMT. In Frankfurt, the Dax lost 0.22% and in London the FTSE rose 0.05%, driven by the personal goods sector (+2.77%) according to an economic indicator.
The pan-European FTSEurofirst 300 index fell by 0.06% and the euro zone’s EuroStoxx 50 by 0.12%. The Stoxx 600 nibbles 0.01%, its gains mainly limited by the decline in the European transport and leisure sector (-1.08%) following the disappointing forecasts from Flutter (-2.31%), the world’s number one online betting.
The continuation of the improvement in banks (+0.28%) and in cars (+1.06%) after a report showing that Volkswagen (+2.44%) plans to sell up to $1.08 billion of shares in Traton (-3.55%), its heavyweight subsidiary, offers some support to the Stoxx 600.
However, trade remains fearful, with indices near their all-time highs and investors awaiting several indicators expected this week.
The US Department of Labor will publish the producer price index (PPI) at 12:30 GMT ahead of the consumer price index (CPI) scheduled for Wednesday, while the chairman of the US central bank (Fed), Jerome Powell, due to speak at 14:00 GMT, could provide details on developments in inflation and interest rates.
“Any sign of a slowdown in CPI would benefit both US and European stocks and would certainly make it easier for the ECB (European Central Bank) to cut interest rates,” said Stuart Cole, chief macro economist at Equiti Capital.
Other experts emphasize the importance of US inflation indicators for the decisions of the ECB, which may begin its monetary easing in June.
“Although many ECB speakers have emphasized the independence of the Frankfurt institution from the Fed, history tells us that deviations over the past 25 years have been viewed as missteps,” write analysts at ING Research.
“Inflationary dynamics tend to be coupled, so it is unwise to ignore signs of recovery (of the economy) on the other side of the bank,” they add.
Ahead of the release of eurozone-wide inflation figures on Friday, inflation in Germany, the bloc’s biggest economy, was confirmed this Tuesday at 2.4% year-on-year in April.
VALUES TO FOLLOW AT WALL STREET
Home Depot fell 1% in premarket trading after the home improvement specialist posted a bigger-than-expected drop in its quarterly sales on a comparable basis on Tuesday.
VALUES IN EUROPE
In Paris, on the SBF 120, Solutions 30, the biggest decliner in the index, fell 6.15% after a drop in revenue in Italy in the first quarter, while Valneva jumped 8.57% at the top of the index.
In Frankfurt, Delivery Hero rose 21.64% thanks to a $1.2 billion deal with Uber to take over one of its operations in Taiwan and buy new shares in the company. Rheinmetall fell 3.28% as the German arms maker missed consensus on first-quarter sales and profit.
In Zurich, Alcon jumped 8.39% to a record high as the Swiss ophthalmology group’s margin beat expectations in the first quarter, while hearing aid maker Sonova Holding rose 4.18%, driven by a forecast of accelerated growth for this year.
RATE
Government yields in Europe and the US are largely unchanged on Tuesday ahead of the publication of the US PPI. The yield for ten-year government bonds is 4.4767% and that for the German bund with the same maturity at 2.514%.
CHANGES
The dollar rose slightly by 0.02% against a basket of benchmark currencies. However, the dollar has fallen by almost 1% since the start of May.
The euro, which has gained 1% against the dollar since the start of the month, nipped 0.06% to $1.0795 on Tuesday.
The British pound fell 0.05% to $1.2552 after comments from Bank of England (BoE) chief economist Huw Pill suggested the central bank could consider cutting interest rates over the summer. These comments contrast with the surprise rise in UK wages in the three months to the end of March. However, other data suggest that the labor market is losing some of its inflationary momentum.
OIL
Oil prices were steady on Tuesday as OPEC reaffirmed its forecast of relatively strong growth in global crude oil demand this year and stressed that it sees further upside potential for global economic growth in 2024 and beyond.
Brent rose 0.01% to $83.35 a barrel and U.S. light crude (West Texas Intermediate, WTI) also rose 0.01% to $79.11.
KEY ECONOMIC INDICATORS ON THE AGENDA FOR MAY 14: COUNTRY GMT INDICATOR PERIOD PREVIOUS CONSENSUS US 12:30 Producer Prices (PPI) April +0.3% +0.2%
– over a year +2.2% +2.2% (Written by Claude Chendjou, edited by Kate Entringer)
