by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected on a cautious note at the opening on Thursday, as investors continue to digest recent macroeconomic data, the weakness of which calls for a pause in monetary tightening by central banks but also revives fears of a recession, resulting in falling bond yields and an active search for the dollar and the yen.

Index futures suggest a decline of 0.08% for the CAC 40 in Paris, 0.06% for the Dax in Frankfurt, 0.09% for the FTSE 100 in London and 0.05% for the EuroStoxx 50.

Today’s session should again be driven by economic indicators, including weekly jobless claims in the United States, ahead of the official job market report on Friday.

After the “Jolts” report on job vacancies and the survey by the private firm ADP on job creations in the United States which testified to a slowdown in the labor market, the Reuters consensus predicts for the monthly report of the US Department of Labor, expected Friday, a deceleration of non-farm payrolls in March to 240,000 after 311,000 in February. The unemployment rate is seen stable at 3.6% but the annual average hourly wage could accelerate to 0.3% over one month after rising 0.2% the previous month.

These mixed data, if confirmed, should again perplex investors, torn between worries about the health of the economy and the prospect of a lull or not in central bank interest rates.

“If we paint a bigger picture of what’s going on in the economy right now…so it looks like we’re heading into a recession,” said Brian Klimke, chief investment officer at Cetera Investment Management.

Traders estimate a 60.5% chance of a dovish rate hike from the US Federal Reserve (Fed) in May, but others are pricing in another 25 basis point hike, according to CME’s Fedwatch Barometer Group.

In the euro zone, where the PMI activity indicators in services, published on Wednesday, were mixed, the market expects a rate hike from the European Central Bank (ECB) of 25 basis points in May, June and July.

AT WALL STREET

The New York Stock Exchange ended in disarray on Wednesday, with only the Dow Jones rising, as a series of disappointing economic data fueled concerns about the US economy.

“Fear of a recession is the dominant theme,” said Jay Hatfield, director of InfraCap, in New York, as seven of the eleven major sectors of the S&P-500 ended the session in the red, including industrials. .

The Dow Jones index gained 0.24% to 33,482.72 points.

The broader S&P-500 lost 0.25% to 4,090.38 points.

The Nasdaq Composite fell for its part by 1.07% to 11,996.86 points.

The Dow Jones was kept in the green thanks in particular to Johnson & Johnson, up 4.5% after advancing on an amicable settlement of complaints related to talc.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index fell 1.33% to 27,442.14 points and the wider Topix fell 1.21% to 1,959.89 points as the close approached.

In China, the Shanghai SSE Composite lost 0.16% and the CSI 300 lost 0.44%.

Activity in China’s services sector grew in March at its fastest pace in two and a half years, with the PMI index calculated by Caixin/S&P Global at 57.8 after 55.0 in February.

The MSCI index comprising stocks from Asia and the Pacific (excluding Japan) is down 0.8%

CHANGES

The dollar, a safe haven asset, rose 0.16% against a basket of benchmark currencies. The yen, for its part, advanced 0.1% to 131.20 dollars.

“It makes sense to insure against risks before the long Easter weekend,” said Tony Sycamore, analyst at IG, in a note, when a large part of the financial markets will be closed on Friday.

The euro, down (-0.13%), stands at 1.0889 dollars.

RATE

The yield on ten-year US Treasury bills was stable on Friday, at 3.2939%, after hitting a nearly seven-month low the previous day, at 3.266%. The two-year yields a little more than a basis point, to 3.7543%, after having plunged the day before to 3.646%.

OIL

The weakness of the latest macroeconomic data weighs on oil prices, reigniting concerns about demand.

Brent fell 0.61% to 84.47 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.73% to 80.02 dollars.

(Written by Claude Chendjou, edited by Jean-Stéphane Brosse)

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