EUROPEAN SCHOLARSHIPS ARE PROGRESSING
PARIS (Reuters) – Wall Street is expected to rise and European stocks rose mid-session on Friday, with general market sentiment remaining supportive of risk-taking after inflation and interest rate fears subsided. interest.
Futures contracts on the main New York indices are currently pointing to an increase of 0.35% for the Dow Jones, 0.4% for the Standard & Poor’s 500 and 0.46% for the Nasdaq.
In Paris, the CAC 40 gained 0.18% to 6,556.13 points around 10:55 GMT after peaking at 6,587.84, the highest since June 6. In London, the FTSE 100 takes 0.28% and in Frankfurt, the Dax advances by 0.37%.
The EuroStoxx 50 index is up 0.19% while the FTSEurofirst 300 climbs 0.02% and the Stoxx 600 0.04%.
The latter currently shows an increase of 1.06% since the start of the week, against +1.29% for the CAC 40 and +1.5% for the S&P-500, which is therefore heading towards its fourth positive weekly performance in a row.
This continuation of the rebound is explained above all by a double good surprise on US inflation (the less sharp rise than anticipated in consumer prices and the unexpected fall in producer prices), which allayed fears of a third 75 basis point rate hike from the Federal Reserve.
But this appeasement is only partial and the words of Fed officials continue to fuel speculation: Thursday, Mary Daly, president of the San Francisco regional branch, admittedly acknowledged that the hypothesis of an increase half a point in September “makes sense” but she did not rule out a 75-point hike.
“There is still a lot of uncertainty about the evolution of oil and other components of the consumer price index, but it is clear that the peak of inflation is behind us,” said John Vail, director of the strategy of Nikko Asset Management, in a note.
“The key question is how far and how fast it will come down. We think inflation is going to stay strong and central banks will have to be more hawkish than the consensus.”
Investors will watch at 2:00 p.m. GMT the first estimate of the US consumer confidence index established by the University of Michigan, a barometer which should confirm its start of rebound after the historic low hit in June.
VALUES IN EUROPE
The majority of the major sectors of the European rating evolve in the green at mid-session, the strongest increase being for that of transport and leisure, whose Stoxx index takes 2.8% thanks to the jump of 11.58% of the Irish betting and gaming specialist Flutter (owner of Paddy Power and Betfair among others) after strong growth results.
The pharmaceutical groups Sanofi (+0.87%), GlaxoSmithKline (+3.40%) and Haleon (+1.62%) are also regaining some ground after their fall in the last two days, several analysts playing down the financial risks related to the Zantac file.
Down, TF1 yielded 3.03% after the lowering of Barclays’ recommendation to “underweight” against “overweight”; the bank explains that it no longer believes in the merger with M6 (+0.00%) and considers TF1 more exposed than its major competitors to the risk of recession.
RATE
Yields on US Treasuries are down slightly, to 2.8675% for the 10-year and 3.2006% for the two-year, giving up a small chunk of Thursday’s gains.
The two-to-ten-year segment of the yield curve remains inverted, but the spread between the two maturities has returned to less than 35 basis points, against 56 on Wednesday, its highest level since 2000.
In Europe, benchmark yields continue to rise, to 0.989% for the ten-year German, which rose above 1% in the morning for the first time since July 28, and 1.546% for its French equivalent.
The market continues to price in a 50 basis point rate hike from the European Central Bank (ECB) next month, according to Refinitiv data. And the inflation rate “five years in five years” in the euro zone, a reflection of investors’ long-term expectations, reached its highest level since July 4 at 2.1125%.
CHANGES
The dollar appreciated against other major values (+0.41%) after the latest statements by Fed officials, an increase which caused the euro to fall below 1.03 (-0.28%).
The greenback, however, at this stage shows a weekly decline of more than 1%, a consequence of the less sharp rise in prices in the United States than anticipated.
The British pound, for its part, lost ground after the statistics showed a contraction in the British gross domestic product (GDP) in June.
OIL
The oil market remains volatile: rising at the start of the day, it is now moving into the red, although it is still heading for a positive weekly performance thanks to the temporary easing of fears for global demand.
Brent fell 0.77% to 98.83 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.08% to 93.32 dollars.
Brent is up just over 4% weekly after falling 14% last week.
(Writing by Marc Angrand, editing by Kate Entringer)