by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected to be slightly lower on Friday at the opening, the day after a euphoric session on the markets following the announcements of three major central banks which fueled hopes of an end impending cycle in the rise in interest rates.
This scenario of a possible marked slowdown in inflation and a soft landing for the economy remains to be confirmed and new macroeconomic indicators, including the monthly US employment report scheduled for the day, will be closely watched.
Index futures suggest a decline of 0.21% for the CAC 40 in Paris, 0.39% for the Dax in Frankfurt, 0.09% for the FTSE 100 in London and 0.38% for the EuroStoxx 50.
After the American Federal Reserve (Fed) which showed itself Wednesday evening more optimistic on the deceleration of the rise in prices in the United States, the markets saw in the announcements Thursday of the European Central Bank (ECB) and the Bank of England (BoE) that only one or two significant rate hikes would still be needed to curb inflation.
“It appears investors are betting that inflation will continue to decline significantly and sustainably, which will allow central banks to not pursue as aggressive a tightening cycle as they would like the markets to believe right now. “, explains Craig Erlam, analyst at OANDA.
Apart from the publication of the report on employment in the United States, the monthly PMI indicators of activity in Europe and the United States, and the producer price statistics in the euro zone are expected.
In addition to monetary policy announcements, the recent rally in the markets was supported by results and forecasts from tech giants, including Meta Platforms which ended Thursday with a gain of 23.28%. Apple, Alphabet and Amazon, which published their quarterly accounts after the close of Wall Street on Thursday, were however disappointed and fell 4.1% to 4.4% in out-of-hours trading.
In France, Sanofi announced on Friday that it expects net earnings per share (EPS) growth in its activities in 2023 in the low single-digit range.
Also on the agenda today are publications from Intesa Sanpaolo in Europe and those from Cigna and Regeneron in the United States.
AT WALL STREET
The New York Stock Exchange ended in scattered order on Thursday, despite the euphoria of the Nasdaq carried by the good results of Meta Platforms and the confirmation by the Fed of a slowdown in its rate hike intended to fight against inflation.
The Dow Jones index fell 0.11%, or 39.02 points, to 34,053.94 points.
The broader S&P-500 gained 60.55 points, or 1.47%, to 4,179.76 points.
The Nasdaq Composite jumped 384.5 points (3.25%) to 12,200.82 points.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index ended Friday with a gain of 0.39% to 27,509.46 points, supported in particular by Sony (+ 6.18%) which raised its outlook and its console sales target PlayStation 5. The broader Topix rose 0.26% to 1,970.26 points.
In China, the Shanghai SSE Composite fell 0.68% and the CSI 300 fell 0.95%, despite the country’s service sector picking up in January for the first time in five months. he PMI index calculated by Caixin/S&P Global came out at 52.9 after 48.0 in December.
RATE
The yield on ten-year US Treasuries was virtually stable at 3.38% as investors digested the Fed’s announcements.
Its German equivalent of the same maturity, which fell Thursday by more than 20 basis points after the decisions of the ECB, rose very slightly on Friday, to 2.08%.
CHANGES
On the foreign exchange market, the dollar is starting to rise again after the decline of recent days, recovering 0.08% against a basket of international currencies.
The euro, which hit a 10-month high of $1.1033 on Thursday, fell to $1.0902 on Friday.
The British pound is trading at $1.2217, a two-week low.
OIL
Oil prices were broadly stable on Friday but headed for a second straight week in the red as the market still awaits signs of a pick-up in Chinese demand for crude and details of further sanctions being considered by the Europeans against Russia in the framework of the EU-Ukraine summit.
Brent lost 0.21% to 82 dollars a barrel and American light crude (West Texas Intermediate, WTI) 0.25% to 75.69 dollars.
(Written by Claude Chendjou, edited by Jean-Stéphane Brosse)
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