by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected to rise on Friday amid optimism about a rapid cut in key rates but the potential for gains could be limited before the publication of an inflation indicator in the United States likely to influence the decisions of central banks.
According to the first available indications, the Parisian CAC 40, which recorded a record session on Thursday, should gain 0.43% at the opening. The Dax in Frankfurt could gain 0.49% after also rising to an unprecedented peak on Thursday. The FTSE 100 in London is expected to increase by 0.58%. The EuroStoxx 50 index could advance by 0.55%.
Investors will see the final consumer price statistics (CPI) in France at 07:45 GMT before those for the entire euro zone scheduled for next week. The Reuters consensus forecasts a contraction of 0.2% over one month and an increase of 3.4% over one year in January of the CPI according to European standards.
In the United States, after consumer prices, published at the start of the week, which showed a surprise acceleration, place this Friday, at 1:30 p.m. GMT, on producer prices (PPI), whose forecasts are counting on a rebound to 0.1% on a monthly basis but a slowdown to 0.6% on an annual basis.
These statistics will be monitored as data on retail sales in the United States, published on Thursday, revived the hypothesis of a rate cut by the American Federal Reserve (Fed) in June.
The governor of the Bank of France, François Villeroy de Galhau, estimated on Friday that the European Central Bank (ECB) could not “exaggerately postpone the first cut” in rates.
In addition to inflation, the session should be marked by other indicators such as retail sales in the United Kingdom, which showed a stronger rebound than expected in January. Household morale in the United States, as well as new quarterly company publications are also on the agenda
A WALL STREET
The New York Stock Exchange ended up on Thursday after the publication of data on retail sales in the United States which gave credence to the hypothesis that the Fed will ease its monetary policy in the coming months.
The Dow Jones index gained 0.91%, or 350.07 points, to 38,774.73 points.
The broader S&P-500 gained 29.05 points, or 0.58%, to 5,029.67 points.
The Nasdaq Composite advanced 47.03 points (0.30%) to 15,906.17 points.
Contributing to market optimism, 80.3% of S&P-500 companies reporting quarterly results beat expectations, according to LSEG data.
On the value side, Cisco Systems lost 2.43% after the announcement of a plan to cut jobs around the world and a downwardly revised annual turnover target.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index ended with a gain of 0.86% to 38,487.24 points, after having come close to its historic high of December 29, 1989, at 38,957.44 points, which then marked the apogee of the Japanese “economic bubble”. The index is up 4.3% for the whole week.
The broader Japanese Topix gained 1.27% to 2,624.73 points at the close.
Nomura estimates that the Nikkei will reach 40,000 points by the end of the year with the end of deflation in Japan and the improvement of corporate governance in the country.
The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) gained 0.9% and is heading towards a weekly increase of 1.9%.
In China, markets remain closed until February 19 due to the Lunar New Year holiday.
EXCHANGES/RATES
The dollar, which lost 0.4% on Thursday, rose 0.08% on Friday against a basket of benchmark currencies and is on track to record a fifth consecutive weekly gain as currency traders digest the latest macroeconomic data .
The euro fell 0.06%, to 1.0764 dollars, not far from its three-month low, reached this week at 1.0695 dollars.
The yen is trading at 150.2 per dollar (-0.19%) as Bank of Japan Governor Kazuo Ueda said on Friday that monetary policy would most likely remain accommodative even after interest rates end. negative interest rates, echoing recent comments from other BoJ officials that weighed on the Japanese currency.
The pound sterling is trading at $1.2587 (-0.1%) after a brief rebound linked to better-than-expected monthly retail sales figures in the United Kingdom. However, markets still anticipate rate cuts in the United Kingdom of 73 basis points this year, compared to 60 basis points at the start of the week, as the country entered recession at the end of 2023.
RATE
The yield on ten-year US Treasury bonds rose slightly, by three basis points, to 4.2693%, after a decline of three points the day before. Over the week as a whole, it posted a gain of around six points.
The ten-year German Bund yield rose 3.1 points to 2.382% after a volatile session on Thursday.
OIL
Oil prices fell slightly on Friday after increasing the day before due to weak data on retail sales in the United States, which raised optimism about a possible cut in Fed rates earlier than expected.
Brent fell by 0.13% to $82.75 per barrel and American light crude (West Texas Intermediate, WTI) by 0.05% to $78.07.
(Written by Claude Chendjou, edited by Tangi Salaün)
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