PARIS (Reuters) – The main European stock markets are oriented in the red on Thursday morning in a context of questions about the evolution of interest rates and caution before the publication of the monthly US employment report on Friday.

In Paris, the CAC 40 lost 0.36% to 7,298.11 points around 08:55 GMT. In London, the FTSE 100 fell 0.49% and in Frankfurt, the Dax lost 0.06%.

The EuroStoxx 50 index fell by 0.29%, the FTSEurofirst 300 by 0.17% and the Stoxx 600 by 0.35%.

Futures contracts on Wall Street also predict a decline of 0.1% for the Dow Jones, 0.2% for the Standard & Poor’s 500 and 0.4% for the Nasdaq.

The market is jittery as US Federal Reserve (Fed) Chairman Jerome Powell, while still on the offensive on interest rates, said on Wednesday that nothing had been decided yet for the 21 and March 22 and that it would basically be based on the data expected by then.

The US Department of Labor is due to release its February employment report on Friday after the sharp acceleration in job creations in January. Data published on Wednesday by the ADP firm on employment and the “Jolts” survey on job offers showed a still dynamic labor market despite the Fed’s desire to curb demand to curb inflation. The figures for weekly jobless claims in the United States, expected this Thursday at 1:30 p.m. GMT, will be watched to confirm or invalidate this dynamic.

Meanwhile, markets are now pricing in a 78.6% probability of a 50 basis point Fed rate hike this month, up from around 30% at the start of the week, according to CME Group’s FedWatch Barometer.

In Europe, where the level of inflation is also a concern for the European Central Bank (ECB), the governor of the Banque de France, François Villeroy de Galhau, said on Thursday that it should be halved in France by the end of 2023 and that the Frankfurt institution was determined to bring it down to around 2% by the end of 2024, the end of 2025.

On the stock market, the basic resources compartment (-1.66%) shows the largest sectoral decline, the dollar being close to a three-month high against a basket of major currencies.

Financial publications also stimulated the exchanges, like Vivendi, which fell by 0.81% after an annual net loss group share of 1.01 billion euros, mainly due to the deconsolidation of Telecom Italia (-0 ,32%).

JCDecaux plunges 11.59% after its annual results after the group decided not to pay a dividend in 2023.

On the upside, Dassault Aviation jumped 9.39% after better than expected results in 2022.

Elsewhere in Europe, Aviva took 3.51% after a 35% jump in operating profit in 2022 and the announcement of a share buyback program. Hugo Boss fell 1.97% on a warning that its sales will slow this year and German real estate group LEG Immobilien fell 9% for suspending the dividend.

Credit Suisse yields 2.95% after the announcement Thursday of the postponement of the publication of its annual report following an intervention by the Securities and Exchange Commission (SEC), the American stock market policeman.

(Written by Claude Chendjou, edited by Blandine Hénault)

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