PARIS (Reuters) – Wall Street is expected to fall on Friday, while European stock markets are progressing mid-session as the markets reposition themselves after a week full of indicators.
Futures on New York indices suggest Wall Street opening in the green, with the Dow Jones falling 0.27%, while the Standard & Poor’s 500 loses 0.44% and the Nasdaq 0.6%.
In Paris, the CAC 40 advanced 0.75% to 8,083.9 points around 11:00 GMT. The Dax in Frankfurt gained 0.88%, compared to 1.19% for the FTSE in London, supported by stocks linked to raw materials.
The pan-European FTSEurofirst 300 index rose by 1%, compared to 0.67% for the EuroStoxx 50 and 0.85% for the Stoxx 600.
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Investors are digesting the latest indicators which suggest that the gap between the monetary policies of the euro zone and the United States could widen in the coming months.
On the American side, the stronger-than-expected rebound in inflation in March raises fears that price dynamics will prove more persistent than expected, which would push the Federal Reserve to relax its monetary policy less than expected in 2024.
Several members of the Fed’s Board of Governors declared on Thursday that there was no urgency to lower rates, as activity remained resilient.
In this context, American sovereigns corrected, with the 10-year yield exceeding 4.5% on Friday, and putting pressure on risky assets. The rise in oil prices, which remain close to $90, is also eroding risk appetite.
On the European side, investors welcome the latest meeting of the European Central Bank (ECB): if the institution has not formally indicated that it would lower its rates, its press release mentions this possibility for the first time, especially since the BCE reiterated that it was not “dependent on the Fed”.
The markets are therefore still betting on a decline in June, and the decline in yields on Friday supports stocks in Europe.
The final inflation for March in Germany and France, published on Friday, was also in line with the consensus, reassuring about the continuation of the disinflation process.
RATE
Yields are falling in Europe after reaching record levels over several months on Thursday, before the ECB’s decision.
The German ten-year yield weakened by 10.4 bp to 2.372%, that of the two-year rate lost 7.9 bp to 2.89%.
The yield on the ten-year Treasury lost 4.4 bps to 4.5318%, while the two-year fell by 4.3 bps to 4.9178%.
VALUES TO FOLLOW IN WALL STREET
Results from Blackrock, JPMorgan Chase and Citigroup are due Friday.
Earlier this year, Chinese authorities asked the country’s largest telecom operators to phase out foreign processors from their networks by 2027, the Wall Street Journal reported Friday, putting pressure on chipmakers electronics before opening.
VALUES TO FOLLOW IN EUROPE
The markets welcome the ECB’s latest decision and are positioning themselves for future rate cuts.
The rise in oil supports energy-related stocks, with the raw materials sector rising 2.79%. TotalEnergies takes 1.82%, Engie 1.83%, BP advances by 2.94% and Shell by 2.32%.
Société Générale climbs 4.9% after announcing on Friday the conclusion of an agreement with the Moroccan conglomerate Groupe Saham for the sale of two of its subsidiaries in the country, as part of a transaction estimated at 745 million euros .
CHANGES
The dollar is strengthening as investors position themselves for restrictive US monetary policy for longer than Eurozone monetary policy.
The dollar advanced 0.62% against a basket of reference currencies, the euro lost 0.72% to 1.0647 dollars, and the pound sterling lost 0.65% to 1.2469 dollars.
OIL
Crude is strengthening and returning above $90 per barrel, with markets still worried about a possible conflagration in the Middle East after the strike against the Iranian embassy in Damascus, attributed to Israel.
Brent is up 1.14% to $90.76 per barrel, the price of American light crude (West Texas Intermediate, WTI) increases by 1.28% to $86.11.
(Written by Corentin Chappron, edited by)
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