Markets should move little at the open 
 
 
 
 
Eurostoxx 50 3,507.98 points +1.30% 
CAC 40 5,558.42 points +1.21% 
DAX 30 13,292.44 points +1.26% 
FTSE 100 6,432.17 points +1.55% 
SMI 10,491.59 points +0.26% 
AEX 607.46 points +1.01% 
BEL 20 3,724.22 points +3.05% 
IBEX 35 8,143.20 points +2.03% 
 
DJIA 30,046.24 points +1.54% 
Nasdaq 12,036.79 points +1.31% 
S&P 500 3,635.41 points +1.62% 
 
Nikkei 225 26,296.86 points +0.50% (closing price) 
 
Exchange rate at 06:50 
Change from the close in New York 
 
EUR/USD 1.1903 +0.08% 
EUR/JPY 124.36 +0.12% 
USD/JPY 104.49 +0.04% 
 
   

TO FOLLOW IN FRANCE

Elior publishes its results for the year ended September 30, 2020 on Wednesday. Plastic Omnium presents its hydrogen strategy.

Investors will also react to the words of the President of the Republic, Emmanuel Macron, who announced Tuesday evening an easing of confinement from Saturday. On this date, shops will be able to reopen until 9 p.m., with the exception of bars and restaurants. A second stage of deconfinement is planned from December 15 if the health situation allows. Restrictions on the movement of the population should then be lifted. Bars and restaurants could reopen on January 20, as part of a third phase of easing measures.

SHARES

European equities are expected to have a lackluster start to trading on Wednesday, after posting strong gains the day before on improving political conditions in the United States and hopes for an easing of the the health crisis.

Around 7:40 a.m., the CAC 40 futures contract gained 10 points, or 0.2%, according to data from broker IG Markets. The contract on the DAX 30 yielded 7 points, or 0.05%, and that on the FTSE 100 rose by 22 points, or 0.3%.

Although some fund managers are still expecting setbacks, such as vaccine refusals or supply problems that could hamper the distribution of the vaccine, investors generally believe that the outlook looks better than in the spring.

"We believed in human ingenuity from the start," said Mike Stritch, Chief Investment Officer of BMO Wealth Management. "Everyone is betting on progress this year, and that's also our baseline scenario," he adds.

On the political front, U.S. President-elect Joe Biden on Tuesday began the transition process rapidly in preparation for his arrival in the White House after the Trump administration announced its intention to cooperate with his team.

In addition, the Federal Reserve is well prepared to face the difficulties of the American economy and can at any time activate emergency financing measures if the situation requires it, indicated Tuesday the president of the Fed of New York.

“We are still in a deep recession,” with high unemployment and an economy far from healthy despite its recent dramatic recovery, John Williams said during a virtual conference hosted by The Wall Street Journal.

Faced with this situation, the central banker, who participates in this year's rate vote in the institution's monetary policy committee (FOMC), stressed that the Fed has the ability to further help the economy with " powerful tools.

Tuesday evening, Wall Street ended up sharply on Tuesday, allowing its flagship index to rise above the 30,000 point mark for the first time in its history. The Dow Jones index (DJIA) rose 1.5% to 30,046 points, a new record. The broader S&P 500 index closed up 1.6% to 3,635 points, also an all-time high. The Nasdaq Composite gained 1.3% to 12,036 points, approaching the record of 12,056 points set in September.

In Asia, the main stock exchanges presented a mixed picture on Wednesday. If the Nikkei index of the Tokyo Stock Exchange ended up 0.5%, the Shanghai Composite lost 0.9% at the end of the session. In Hong Kong, the Hang Seng rose 0.3%.

Investors will also be attentive on Wednesday to the financial stability report of the European Central Bank (ECB), to the minutes of the last meeting of the Fed, as well as to a series of economic indicators in the United States: second estimate of the product gross domestic (GDP) in the third quarter, jobless claims for the week of November 21, durable goods orders, household spending and income and new home sales in October, Michigan consumer confidence index in November and oil inventories for the week of November 20.

OBLIGATIONS

Yields on US Treasury bonds continued to rise on Wednesday, with news of the upcoming appointment of Janet Yellen, who said she favors higher government spending, as Treasury Secretary weighing on bonds. The yield on the ten-year Treasury note stood at 0.878% on Wednesday, compared to 0.881% on Tuesday.

"Markets viewed [Janet] Yellen as a likely choice," Citigroup economists said in a note. “While she supports additional fiscal stimulus, it will ultimately be Congress, with most likely a Republican Senate, that will lead the spending legislation,” they point out.

CHANGES

The euro is unchanged Wednesday morning against the dollar.

According to DailyFX.com, recent news regarding experimental Covid-19 vaccines gives hope that physical distancing measures and travel restrictions will be lifted soon. The specialist in currency, commodity and index trading research also believes that the transition that began in the White House has removed most of the post-election uncertainty in the United States.

According to Societe Generale , the implied volatility of the euro/dollar pair, which measures the cost of insuring against large fluctuations in the exchange rate, has fallen sharply but is expected to rise next year.

“Current volatility levels are likely a floor, providing an interesting entry point to build long vega positions,” says Olivier Korber, at Societe Generale . The foreign exchange market should remain a "key macroeconomic shock absorber" and even a reflationary environment is unlikely to "significantly depress" implied volatility, it says.

OIL

Oil prices continued to rise on Wednesday morning, after closing the day before at levels not seen since the start of the coronavirus pandemic in Europe in March. Investors continue to welcome advances in vaccine research and the beginning of the transfer of power between the Trump administration and that of President-elect Joe Biden in the United States.

However, the trade association American Petroleum Institute (API) reported a sharper-than-expected rise of 3.8 million barrels in crude inventories in the United States last week. These figures could weigh on prices, warns Axi.

The API data was released ahead of the US Department of Energy 's release of the official report on US oil reserves last week. Economists polled by the Wall Street Journal anticipate unchanged crude inventories and an increase of 800,000 barrels in gasoline inventories.

As of 7:30 a.m., the January contract on Brent North Sea crude was up 39 cents, at $48.29 a barrel, while that on Nymex-listed light sweet crude (WTI) was up 32 cents, at $45.23. the barrel.