by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected to rise slightly on Friday despite Wall Street closing in the red the day before, but the trend should remain cautious due to an almost general monetary tightening by the major central banks around the world. the economic outlook is deteriorating.
Index futures suggest a rise of 0.35% for the CAC 40 in Paris, 0.22% for the Dax in Frankfurt, 0.39% for the FTSE 100 in London and 0.2% for the EuroStoxx 50.
The almost synchronized rise this week in interest rates by several central banks, including the US Federal Reserve, and the multiple warnings on the risks of recession heighten uncertainties, pushing investors to take refuge in the dollar and the bond market to the detriment stocks, say analysts.
“Excessive quantitative easing over the past decade is going to lead to excessive tightening and the market has no way to properly gauge the impact on prices,” said David Bahnsen, chief investment officer at wealth manager The Bahnsen Group.
The publication this Friday of monthly PMIs on manufacturing activity and that of services could, however, provide investors with new elements on the evolution of the economic situation.
The Reuters consensus expects a further contraction in the euro zone of the composite PMI index, which includes the manufacturing industry sector and the services sector, to 49.0 in September after 49.6 the previous month.
In Great Britain, the new Prime Minister Liz Truss must also announce this Friday a new “growth plan” which should provide additional budgetary support to the economy.
AT WALL STREET
The New York Stock Exchange ended lower on Thursday, as technology and growth stocks suffered from the rate hike decided on Wednesday by the US Federal Reserve.
The Dow Jones Industrial Average fell 0.35%, or 107.1 points, to 30,076.68 points.
The broader S&P-500 fell 31.94 points, or 0.84%, to 3,757.99 points.
The Nasdaq Composite fell for its part by 153.39 points (-1.37%) to 11,066.81 points.
IN ASIA
Markets are closed in Tokyo.
In China, the Shanghai SSE Composite lost 0.58% and the CSI 300 lost 0.34%.
RATE
Bond yields are benefiting from announcements this week of interest rate hikes in the US, UK, Sweden, Switzerland and Norway among others.
The yield of the two-year German, which touched Thursday in session a high of more than 11 years at 1.897%, advances Friday of a little more than a basis point to 1.863%. The ten-year one crossed the 2% mark for the first time since 2013, at 2.011%, up nearly three points.
In the United States, the yield of ten-year Treasuries, which gained up to 20 basis points on Thursday to 3.71%, took another nearly two points on Friday to 3.7265%. It is driven by rising rate expectations, with the Fed announcing that rates could peak at 4.6% in 2023.
CHANGES
On the foreign exchange market, traders continue to digest the announcement Thursday of an intervention by Japan to support the yen, a first since 1998.
The yen, which rose before this intervention to nearly 146 to the dollar, is trading Friday at 142.21, up 0.1% against the greenback.
The euro, down 0.1% to 0.9826 dollars, is penalized by the energy crisis in Europe and the evolution of the war in Ukraine, referendums on an attachment to Russia having started this Friday in the territories occupied Ukrainians.
The Chinese yuan, which fell to 7.0964 to the dollar, is near a two-year low.
The dollar, which is at a 20-year high, is almost stable (-0.08%) against a basket of reference currencies, thanks to its status as a safe haven asset and the sustained pace of the rise in interest rates. fed.
OIL
Oil prices are almost stable, but the strength of the dollar and fears about demand limit the gains.
Brent nibbles 0.04% to 90.42 dollars a barrel and American light crude (West Texas Intermediate, WTI) takes 0.04% to 83.46 dollars a barrel.
(Written by Claude Chendjou, edited by Jean-Stéphane Brosse and Kate Entringer)