by Laetitia Volga
PARIS (Reuters) – The main European stock markets are expected to open higher on Friday after Beijing eased some measures against COVID-19 and encouraging inflation figures in the United States, which reinforce hopes of a decrease. the pace of monetary tightening by the Federal Reserve.
Futures contracts suggest an increase of 1.08% for the CAC 40 in Paris, 0.71% for the Dax in Frankfurt and 0.34% for the FTSE in London.
Index futures accelerated after the announcement by the Chinese authorities of a reduction in the duration of the quarantine imposed on contact persons and travelers from abroad.
On the Chinese markets, this announcement was greeted by a sharp rise in stock market indices: the CSI 300 index climbed 2.79% and the SSE Composite of Shanghai by 1.69%.
“Reopening is likely to be a long process. Nonetheless, it is an important step in the right direction,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management.
The Stoxx 600, the benchmark index in Europe, ended up 2.75% on Friday, at its highest level since the end of August, after the announcement of a greater than expected slowdown in inflation in the United States. United States in October, which could encourage the Fed to opt for lower rate hikes.
The consumer price index rose by 7.7% over one year, against +8.2% in September, marking its slowest increase since January.
Fed funds futures indicate markets are pricing a 71.5% chance of a half-point rate hike at the December meeting.
AT WALL STREET
The New York Stock Exchange experienced its best session in more than two and a half years on Thursday after the monthly figures for US inflation and the hope that the Fed would moderate the rise in interest rates. [.NFR]
The Dow Jones index gained 1,201.43 points, or 3.7%, to 33,715.37, the Standard & Poor’s 500 gained 207.8 points, or 5.54%, to 3,956.37 and the Nasdaq Composite rose 760.97 points, or 7.35%, to 11,114.15.
We have to go back to the spring of 2020, a period marked by significant market fluctuations at the start of the COVID-19 pandemic, to find such spectacular performances.
The CBOE volatility index fell almost ten points to 23.53, the lowest since mid-September.
All the major S&P-500 sector indices ended in the green, but the most spectacular performances benefited the compartments most sensitive to changes in interest rates: that of non-constrained consumer products gained 7.7%, that of high technologies 8.33%, that of real estate 7.75%.
Among the large caps of “tech”, Salesforce won 10.02%, the best performance of the Dow Jones, Microsoft 8.23% and Apple 8.9%.
Futures contracts are signaling a gain of 0.56% for the Dow Jones, 0.66% for the Standard & Poor’s-500 and 0.8% for the Nasdaq.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei gained 2.98% and recorded a two-month peak in session, driven by growth stocks in the wake of Wall Street.
EXCHANGES/RATES
The dollar remains on a downward trend against a basket of benchmark currencies (-0.43%) after falling 2.12% the day before in reaction to inflation figures in the United States.
The euro, which took nearly 2% on Thursday, gained 0.25% to 1.0238 dollars
The Chinese yuan, boosted by announcements of a relaxation of certain measures against COVID-19, is evolving at its highest level in seven weeks.
US bond markets are closed for Veterans Day. On Thursday, the ten-year Treasuries yield ended the session at 3.829%, its lowest level in five weeks.
In Europe, the ten-year German is trading at 2.016% in early trade after a two-week low at 1.979% on Thursday.
OIL
Oil prices are also benefiting from announcements by the Chinese authorities concerning COVID-19 prevention measures: Brent gains 2.48% to 95.99 dollars a barrel and American light crude (West Texas Intermediate, WTI) is granted 2.57% to $88.69.
(Laetitia Volga)