by Laetitia Volga
PARIS (Reuters) – Wall Street is expected to open close to balance on Friday as European stocks rise mid-session, still buoyed by the prospect of a favorable outcome to talks on the U.S. debt hike ceiling . The “futures” on New York indices signal an opening of Wall Street up about 0.1%. In Paris, the CAC 40 gained 0.62% to 7,493.23 around 10:40 GMT. In Frankfurt, the Dax gained 0.59%, very close to its absolute high reached in November 2022, and in London, the FTSE gained 0.44%.
The pan-European FTSEurofirst 300 index advanced by 0.69%, the EuroStoxx 50 of the euro zone by 0.69% and the Stoxx 600 by 0.67%.
The latter is currently showing an increase of 0.7% over the week, its best weekly performance in six weeks.
The upturn in the markets is due to a certain optimism among investors regarding negotiations in Washington on raising the federal debt ceiling, a subject of contention between Republicans and Democrats.
US President Joe Biden said deal negotiators were making “steady progress” to reach an agreement that would avoid a US default.
As that prospect recedes, so does that of a recession in the world’s largest economy, which could allow the Federal Reserve to maintain tight monetary policy.
Main appointment expected in the afternoon: Jerome Powell, the chairman of the Fed, will speak at a conference in Washington which will begin at 3:00 p.m. GMT. WALL STREET VALUES TO FOLLOW
VALUES IN EUROPE
On the stock market, sectors sensitive to the vitality of the economy such as financial services (2.35%), mining (1.35%) and construction (1.43%) are among the strongest increases.
At individual values, we can note the 2.52% decline of Ubisoft after the downgrading of Citi from “buy” to “sell”.
RATES Benchmark bond yields in the euro zone continue to rise, with optimism linked to US debt and the solid economic statistics published recently.
Last indicator to date, producer prices in Germany rose last month by 4.1% over one year, against +4.0% expected by the Reuters consensus.
The German ten-year rate gained more than six basis points, to 2.478%, and its French equivalent moved to 3.065%.
In the United States, the yield on Treasuries with the same maturity is stable at 3.644%, following a two-month peak at 3.659%.
CHANGES
The dollar is losing ground after gaining more than 1% over the last three sessions, again thanks to optimism about US debt and speculation about the Federal Reserve’s monetary policy.
For some traders, the signs of tightness in the US labor market and the still high level of inflation dim the prospect of a Fed rate cut by the end of the year.
The greenback dropped 0.29% against a basket of international currencies and the euro (+0.22%) took the opportunity to rise to 1.0793.
OIL
The oil market is moving forward again after having lost more than 1% the day before.
Brent gained 1.21% to 76.78 dollars a barrel and American light crude (West Texas Intermediate, WTI) took 1.18% to 72.71 dollars.
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NO ECONOMIC INDICATOR ON TODAY’S AGENDA
(Laetitia Volga, edited by Blandine Hénault)
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