The main European stock markets, with the exception of London, are expected to open lower on Wednesday ahead of the publication of several economic indicators in Europe and the United States, while investors were dampened the previous day by a statistic on the US labor market.

Index futures suggest a decline of 0.27% for the CAC 40 in Paris, 0.11% for the Dax in Frankfurt and 0.26% for the EuroStoxx 50. London's FTSE 100 could claw back 0.01% at the opening.

After PMI data on manufacturing activity in the eurozone, published on Monday, showed a further contraction in March, with households reon Wednesday's composite PMI figures for the eurozone and the UK.

In the United States, the ISM services index for March is due at 14:00 GMT, while the monthly employment survey by private firm ADP should provide further information on the evolution of the labor market before the publication on Friday of the Labor Department's official employment report. On Tuesday, the Labor Department's "Jolts" survey reported that job vacancies had fallen to 9.9 million in February, their lowest level in almost two years.

This latest statistic, which comes on top of the decline in the ISM manufacturing index for March in the United States, published on Monday, reinforces fears of recession, while inflation could be rekindled by the rise in oil prices following OPEC+'s decision to cut production.

Futures contracts, however, suggest that the US Federal Reserve (Fed) is unlikely to raise interest rates any further, and may even cut them by more than 60 basis points this year.

ON WALL STREET

The New York Stock Exchange finished lower on Tuesday following macroeconomic indicators that fueled fears of recession in the United States.

The Dow Jones index gave up 0.59% to 33,403.04 points.

The broader S&P-500 lost 0.58% to 4,100.68 points.

The Nasdaq Composite was down 0.52% at 12,126.33 points.

The banking sector also weakened after JPMorgan Chase CEO Jamie Dimon warned in a letter to shareholders that the crisis in the US banking sector was still ongoing and that its impact would be felt for years to come. Bank of America and Wells Fargo fell by over 2%.

Caterpillar, considered one of the pillars of the industrial sector, shed 5.4%, while Virgin Orbit Holdings plunged over 23% after filing for bankruptcy.

ASIA

On the Tokyo Stock Exchange, the Nikkei index fell by 1.68% to 27,813.26 points, while the broader Topix index closed down 1.92% at 1,983.84 points.

On the macroeconomic statistics front, Japanese services activity rose in March at its fastest pace in over nine years (55.0 after 54.0 in February), but factory activity continued to contract, according to PMI data released on Wednesday.

In China, the Shanghai SSE Composite gained 0.49% and the CSI 300 gained 0.31%, while the MSCI index of Asian and Pacific stocks (excluding Japan) fell by 0.28%.

STOCKS TO WATCH IN EUROPE:

French foodservices group Sodexo announced on Wednesday that it plans to spin off its Benefits & Rewards Services (BRS) business and list it on the stock exchange during 2024.

CHANGES

The dollar is unchanged against a basket of benchmark currencies, at a two-month low, after the latest weak US economic data.

The euro is stable at $1.0952, having hit a two-month high of $1.0973 the previous day, helped by the surprise strength of German exports, which argue in favor of further rate hikes by the European Central Bank (ECB).

The New Zealand dollar gained 1% to 0.6383 U.S. dollars, a two-month high, following the unexpected decision of New Zealand's central bank (RBNZ).(RBNZ) to raise its key interest rate by 50 basis points to 5.25%, its highest level in 14 years, whereas the Reuters consensus forecast a rise of only 25 basis points.

RATES

Yields on ten-year and two-year US Treasuries rose slightly on Wednesday, to 3.3535% and 3.8685% respectively, after declines of 9 basis points and 14 basis points the previous day linked to the drop in US job offers.

Ten-year German Bund yields were virtually unchanged at 2.26% and 2.614%.

OIL

Oil prices continued to benefit from OPEC+'s decision to cut production. US crude inventories also fell by around 4.3 million barrels last week, according to sources. The Energy Information Administration report will be released at 14:30 GMT.

Brent crude gained 0.39% to $85.27 a barrel, and West Texas Intermediate (WTI) 0.33% to $80.98.

(Written by Claude Chendjou, edited by Bertrand Boucey and Kate Entringer)

by Claude Chendjou