by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected on a cautious note at the opening on Friday for the last session of a quarter that started on a bang before the outbreak of a crisis in the banking sector, which revived the uncertainty about the evolution of interest rates and the economic situation, while investors are awaiting a series of macroeconomic indicators in Europe and the United States during the day.
Index futures suggest a rise of 0.09% for the CAC 40 in Paris and 0.11% for the Dax in Frankfurt. A decline of 0.03% is expected on the FTSE 100 in London and stagnation on the EuroStoxx 50.
Among the salvo of statistics on the agenda are notably monthly retail sales in Germany, gross domestic product (GDP) in Great Britain in the fourth quarter, consumer prices in the euro zone for the month of March, US household income and spending in February and last month’s PCE price index, closely followed by the US Federal Reserve (Fed).
The macroeconomic data published the day before were generally mixed with a slowdown in inflation in Spain (+3.1% over one year) but a rise in prices higher than expectations in Germany (+7.8% over one year), while the growth of the American economy in the fourth quarter was a little weaker than initially estimated (+2.6% at an annualized rate instead of 2.7%).
This did not prevent the Stoxx 600 from gaining 1.1% at the close and hitting its highest since March 10 with a 3.7% jump in the European real estate index, with the market now pricing in on a terminal deposit rate of the European Central Bank (ECB) around 3.5%. Christine Lagarde, President of the ECB, is due to speak this Friday at a conference organized by the Osservatorio Permanente Giovani-Editori in Florence.
In the United States, traders are betting on a pause in the Fed’s rate hike in May and a possible drop in the cost of credit soon after, which benefits the technology compartment, with the Nasdaq on track to gain more than 14% over the quarter.
Politically, former US President Donald Trump, a Republican primary candidate, has been indicted by a grand jury in a New York court in an investigation into buying an actress’ silence. X movies in 2016.
VALUES TO FOLLOW IN EUROPE:
AT WALL STREET
The New York Stock Exchange ended up slightly on Thursday in the wake of gains recorded by major technology stocks, while the banking sector fell after the announcement by the White House of new measures intended to strengthen the supervision of medium-sized banks.
The Dow Jones Industrial Average gained 0.43%, or 141.43 points, to 32,859.03 points.
The broader S&P-500 gained 23.02 points, or 0.57%, to 4,050.83 points.
The Nasdaq Composite advanced for its part by 87.24 points (0.73%) to 12,013.47 points.
The technology sector rose 1.1%, confirming its solid rise over the January-March period (around +20% one day to the end of the quarter) and contributing to the performance of the S&P-500.
Economic indicators fueled the hypothesis of a less aggressive Fed monetary policy.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index advanced 0.98% to 28,055.34 points and the Topix, larger, took 1.02% to 2,003.54 points as the closing approached.
A senior IMF official, Ranil Salgado, has urged the Bank of Japan (BoJ) to ease its long-term yield curve control policy.
In China, the Shanghai SSE Composite advanced 0.32% and the CSI 300 gained 0.31%.
Manufacturing activity in China, however, declined in March with the PMI reading at 51.9 from 52.6 in February, suggesting that the prospect of a strong economic recovery from the COVID-19 pandemic is waning.
The MSCI index comprising stocks from Asia and the Pacific (excluding Japan) climbed 1%, heading for its first monthly gain (+2.9%) in four years.
CHANGES
The dollar rose 0.12% against a basket of benchmark currencies, while the euro was stable at 1.0897 dollars (-0.04%).
Over the quarter as a whole, however, the greenback is posting a loss of 1.3% at this stage despite the mini rally observed this month with the banking crisis.
RATE
The yield on ten-year US Treasury bonds was stable on Friday at 3.5507% but lost 36 basis points over the month. The two-year one lost 68 points over the month, to 4.112%.
OIL
The oil market retreats slightly amid uncertainty ahead of important macro data: Brent fell 0.14% to $79.16 a barrel and US light crude (West Texas Intermediate, WTI) 0.12% at $74.28.
(Written by Claude Chendjou, edited by Kate Entringer)
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