by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected to fall on Friday at the opening in the wake of the closing of Wall Street, the rise of the dollar, the accentuation of inflationary pressures and the remarks considered restrictive by certain members of the Reserve federal government (Fed) being likely to fuel risk aversion.

Futures contracts on indices suggest a decline of 0.70% for the CAC 40 in Paris, which on Thursday recorded a record in session at 7,387.29 points.

The Dax in Frankfurt could fall by 0.75%. The FTSE 100 in London, which rose the day before to a historic high of 8,047.06 points, is expected to fall by 0.27%. The EuroStoxx 50, for its part, should fall by 0.84%.

As in the previous sessions, many financial publications of companies in Europe should animate the exchanges, in particular those of EDF, Hermès, Safran, Air France-KLM, Allianz or Mercedez-Benz.

On the statistical side, data on producer prices in the United States on Thursday showed an increase in January at the fastest pace in seven months, while jobless claims in the country fell unexpectedly last week, new a sign of a buoyant labor market as the Fed works to rein in demand to curb inflation.

“The latest data confirms the Fed’s view that we need to keep raising rates and keep them higher, longer,” said Tapas Strickland, an economist at National Australia Bank.

Two Fed officials, Loretta Mester and James Bullard, further said on Thursday that the U.S. central bank likely should have raised rates more than it did earlier this month and stressed that further hikes in the cost credit were essential to bring inflation back to the desired level.

In Europe, where macroeconomic concerns have been relegated to the background in recent sessions thanks to solid corporate results, they could return this Friday with the publication of producer prices in Germany (07:00 GMT), consumer prices in France (07:45 GMT) and retail sales in Great Britain (07:00 GMT).

AT WALL STREET

The New York Stock Exchange ended sharply lower on Thursday after economic indicators fueled fears that the Fed would continue to raise interest rates.

The Dow Jones index fell 1.26% to 33,696.39 points.

The broader S&P-500 lost 1.38% to 4,090.51 points.

The Nasdaq Composite fell 1.78% to 11,855.83 points.

All major sectors of the S&P-500 ended in the red, notably with Tesla, which fell 5.7% following the announcement of the recall of 362,000 vehicles in the United States for a problem related to driving software autonomous.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index ended down 0.66% at 27,513.13 points and the wider Topix fell 0.46% to 1,991.93 points.

In China, the Shanghai SSE Composite lost 0.35% and the CSI 300 lost 0.94%.

The MSCI index comprising the values ​​of Asia and the Pacific (excluding Japan), for its part, fell by 0.68%, heading for a third consecutive week in the red.

RATES/EXCHANGES

Yields on ten-year and two-year US Treasuries rose to 3.87% and 4.65% respectively on Friday.

The dollar advanced 0.12% on Friday against a basket of benchmark currencies, to a new six-week high, while the euro fell 0.34%, to $1.0632, a low since the 9 January.

OIL

Oil prices are heading for a weekly decline of more than 2% on demand concerns over the prospect of a prolonged Fed interest rate hike.

Brent lost 0.97% on Friday to 84.31 dollars a barrel and American light crude (West Texas Intermediate, WTI) 1.07% to 77.65 dollars.

(Written by Claude Chendjou, edited by Matthieu Protard)

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