(CercleFinance.com) – The New York Stock Exchange should open higher on Friday morning, with investors putting aside the threat of a possible ‘shutdown’ this weekend to focus on the welcome slowdown in inflation.
Half an hour before the opening, ‘futures’ contracts on the main New York indices advanced from 0.5% to 0.9%, announcing a green start to the session.
The optimistic camp can rely on the better than expected figures for the ‘core PCE’ index of consumer spending prices excluding food and energy, the inflation indicator deemed most relevant by the Fed.
If this index stood at 3.5% at an annual rate in August, a slight acceleration compared to 3.4% the previous month, it went from 4.3% to 3.9% in ‘one month to the next, excluding volatile elements such as food products and energy.
This statistic came to allay fears of persistent inflation in the United States and a continuation of the Federal Reserve’s high interest rate policy, at the origin of the recent correction movement on the major stock markets. global.
These figures have significantly changed the expectations of investors, who estimate the probability of a new ‘status quo’ in November at almost 85%, compared to 80% yesterday and 52% a month ago.
Following these statistics, which rule out the scenario of further tightening by the Fed, the 10-year yield on US Treasury bonds is falling towards 4.53%, far from the 4.68% reached yesterday.
As a result, the dollar fell to a seven-month low against a basket of reference currencies, as well as against the euro at 1.1280 dollars, after these figures which raise doubts about the need for the Fed to continue its tightening.
Thanks to this good news, investors do not seem at all concerned by the prospect of a potential ‘shutdown’, i.e. a closure of government agencies, as of this weekend.
‘In view of past experiences, the impact on activity should be measured, and largely reversible once the shutdown is over’, recall the economists at Oddo BHF, while considering that it is a shock of Unwelcome uncertainty in the midst of a period of uncertainty about the evolution of the American economy.
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