by Laetitia Volga

PARIS (Reuters) – Major European stock markets are expected to open lower on Friday as concerns over the stability of the banking system resurface after major central banks decided to hike rates in recent days.

The first indications available give a decline of 0.7% for the Parisian CAC 40, 0.48% for the Dax in Frankfurt, 0.66% for the FTSE in London and 0.68% for the EuroStoxx 50 .

Some of the largest central banks in the world, those of the United States, the United Kingdom or the European Union in particular, have increased their interest rates since last week, by 25 or 50 basis points, despite the turmoil in the banking sector.

The Federal Reserve, however, hinted that it could raise rates just one more time this year, a prospect that helped most European markets stabilize on Thursday.

Investors are pricing a nearly 70% chance the Fed won’t touch rates in May, according to the FedWatch barometer, and they mostly expect a cut in US rates by the end of the year, although that Jerome Powell said otherwise.

US Treasury Secretary Janet Yellen said on Thursday that she was ready to take further steps to ensure the safety of Americans’ bank deposits, a day after she dismissed the idea of ​​​​an extension of the deposit guarantee to the beyond the current limit of $250,000.

“The United States is still wondering what it’s going to do about uninsured deposits…that’s partly given us a rollercoaster ride on the stock markets,” said Shane Oliver, chief economist. at AMP.

On the macroeconomic agenda, the first results of the monthly PMI surveys by S&P Global are expected in the morning in Europe for the month of March.

AT WALL STREET

After a jagged session, the New York Stock Exchange ended in the green on Thursday, supported at the end of the day by the words of Janet Yellen.

The Dow Jones index gained 0.23%, or 75.14 points, to 32,105.25 points, the S&P-500 gained 11.75 points, or 0.30%, to 3,948.72 points and the Nasdaq Composite advanced 117.44 points (1.01%) to 11,787.40 points.

All three major Wall Street indexes also benefited from the prospect of an eventual Fed pause in the interest rate hike campaign.

The easing of the bond market, with in particular the fall of 18 basis points in the yields of two-year Treasuries, supported growth stocks and by extension the Nasdaq.

Among the major sectors of the S&P-500, only two – technology (+1.65%) and communication services (+1.83%) – ended the session in the green.

Side values, Accenture jumped 7.3% after announcing the project to reduce its workforce by about 2.5%. Coinbase Global fell 14.1% after the market regulator threatened to take legal action against the cryptocurrency specialist.

IN ASIA

The Tokyo Stock Exchange fell 0.13% as the yen’s rise sparked fears for the earnings of export-oriented companies like automakers Toyota and Honda.

Toshiba gained 4.2% after its board accepted a $15.2 billion takeover bid from a consortium led by investment fund Japan Industrial Partners.

In China, market sentiment is affected by geopolitical tensions between Beijing and Washington, with many US lawmakers convinced of the need to ban the Chinese application Tiktok in the United States.

After making net purchases for nine consecutive sessions, foreign investors are turning away from the Chinese market on the Stock Connect program between Hong Kong, Shanghai and Shenzhen.

The CSI 300 index fell by 0.3% and the Shanghai SSE Composite by 0.61%.

RATES/EXCHANGES

The prospect of moderating monetary tightening in the United States continues to hurt the US government bond market. The yield of ten-year Treasuries fell slightly, to 3.3967%, that of two years to 3.8108%.

The dollar index, which measures fluctuations in the greenback against a benchmark basket, is stable.

The euro is displayed at 1.0828.

OIL

Oil prices are unchanged: Brent fell 0.04% to 75.88 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.01% to 69.95 dollars.

(Laetitia Volga, edited by Jean-Stéphane Brosse)

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