PARIS (Reuters) – Wall Street is expected to open in scattered order on Friday after falling nearly 2% the day before and European stock markets are in the red at mid-session, the difficulties of the American bank SVB, which affect the financial sector, accentuating fears related to the rise in interest rates.
Caution is also required pending the monthly employment figures in the United States, one of the determining factors of the Federal Reserve’s monetary policy. Futures on New York indices signal a decline of 0.19% for the Dow Jones, 0.1% for the Standard & Poor’s-500 but an increase of 0.12% for the Nasdaq. In Paris, the CAC 40 lost 1.08% to 7,237.2 at 12:22 GMT. In Frankfurt, the Dax dropped 1.19% and in London, the FTSE fell 1.7%.
The pan-European FTSEurofirst 300 index fell 1.16%, the Eurozone EuroStoxx 50 fell 1.15% and the Stoxx 600 was down 1.12%.
The MSCI World Index, which includes 47 developed and emerging markets, fell to its lowest level since mid-January.
US banking shares fell on Wall Street on Thursday, dragging the European sector into the red, after the announcement by SVB Financial Group – whose Californian branch finances a number of technology start-ups – of a major capital increase to fill a loss of 1.8 billion dollars following the sale of a bond portfolio.
Some investors fear that other banks, big and small, will also have unrealized losses on their bond portfolios.
The rapid rise in interest rates since last year has in fact reduced the value of the securities held by the banks before the issuing institutions launched their cycles of monetary tightening.
“Higher rates reopen the issue of systemic risk. It’s only jolts so far, but we have to be extremely careful about the impact of higher rates and we’ve overlooked that so far,” he said. said Florian Ielpo, head of macro at Lombard Odier Investment Managers.
And the increase in rates is set to continue, both for the Federal Reserve (Thursday) and for the European Central Bank (March 22). The markets anticipate a rise of 50 basis points in both cases.
All eyes are on Washington with the publication of employment figures in the United States. Economists polled by Reuters on average expect job creation to slow to 203,000 in February, but any upside surprises could bolster speculation that the Fed will tighten monetary policy more quickly.
WALL STREET VALUES TO FOLLOW
In pre-market transactions, SVB shares fell by more than 40%, the day after a fall of more than 60%, while JPMorgan, Citigroup and Wells Fargo fell from 0.6% to 1.1% .
VALUES IN EUROPE
In Europe, the banking sector fell 3.57%, its biggest drop since September. Unicredit, HSBC, Societe Generale and Deutsche Bank lost 2.75% to 7.36%.
Among the other movements of the day, Casino gives up 5.35% after the publication of a drop in current operating income in 2022.
ASML fell 1.20% on uncertainty over new Dutch restrictions on exports of certain technologies to China.
RATES/EXCHANGES
The decline in equities is boosting demand for government bonds: the ten-year German Bund yield fell 11 basis points to 2.533% and its American equivalent fell nearly seven points to 3.8471%.
Despite this, the dollar is stable against a basket of international currencies (-0.06%) pending the official US employment report.
The euro is also unchanged, around 1.0583 dollars.
OIL
The oil market is heading for its biggest weekly loss in five weeks amid concerns about the impact of high interest rates on demand for crude.
Brent fell 0.63% to 81.08 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.81% to 75.11 dollars.
(Laetitia Volga, editing by Kate Entringer)
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