by CORENTIN CHAPPRON

PARIS (Reuters) – Wall Street is expected to rise slightly on Friday as European markets rise mid-session as fears around interest rate developments ease somewhat at the end of a marked week by numerous monetary policy decisions.

Futures on New York indices signal an unchanged opening for the Dow Jones but up 0.09% for the Standard & Poor’s 500 and 0.27% for the Nasdaq.

In Paris, the CAC 40 rose 1.08% to 7,369.36 points around 11:45 GMT, its highest point for almost a month. In Frankfurt, the Dax gained 0.46% and the FTSE, in London, 0.35%.

The pan-European FTSEurofirst 300 index advanced 0.58%, against an increase of 0.67% for the EuroStoxx 50 in the euro zone and 0.58% for the Stoxx 600.

Over the week as a whole, the CAC 40 gained 2.1% at this stage and the Stoxx 600 1.50%.

The day is that of the “four witches”, characterized by the expiry of several futures contracts, but the volatility remains contained: the VIX lost 0.48%, to 14.43 points.

Despite central bankers’ renewed commitment to fighting inflation, markets believe that the slowdown in activity will cause central banks to ease rates sooner than they expect.

The Fed opted for a pause in its rate hike cycle on Wednesday but signaled two hikes ahead. The European Central Bank (ECB) for its part made an eighth consecutive rate hike on Thursday, while the Bank of Japan maintained its ultra-accommodating policy on Friday.

“The combination of a myriad of data pointing to lower inflation and the possibility of further rate hikes (not to mention tightening credit conditions) increases the odds of a monetary policy error,” strategists say. Janus Henderson.

“Investors should be aware that there is a risk that the Fed has already gone too far.”

THE VALUES TO FOLLOW IN WALL STREET

Adobe has revised upwards its forecasts for turnover and profits, supported by its dematerialized computing services (cloud), and takes 3.5% in pre-market transactions.

VALUES IN EUROPE

Rheinmetall shares are up 4.44%, the best performance of the Stoxx 600, as the group’s chief executive said he expects a multibillion-euro ammunition order from the German government.

Conversely, Millicom posted the worst performance of the index, down 6.29%, after announcing the failure of preliminary talks for a takeover with Apollo Global Management.

The defensive healthcare sector advanced 1.27%, the best performance of the sectors in the Stoxx 600 index.

RATE

In Europe, short-term sovereign bond yields remain at elevated levels, with the German two-year holding its highest level in three months at 3.1690%.

Longer-term rates crumble: the ten-year Bund loses 3.1 basis points (bps), to 2.4740%, and the Italian ten-year BTP loses 7.5 bps, to 4.0660% .

In the United States, short rates rose while long rates stagnated: the yield on ten-year Treasuries was stable at 3.7342%, that of two years gained 4.3 bps, at 4.6906%.

CHANGES

The dollar is stabilizing against a basket of benchmark currencies after hitting a one-month low the previous day.

The euro rose slightly against the greenback, trading at 1.0952 dollars (+0.06%), while the pound sterling rose to 1.2794 dollars (+0.10%).

On the other hand, the Bank of Japan’s accommodating policy is weighing on the yen, which lost 0.53% against the dollar, to 141.01.

OIL

The renewed commitment of central banks to fight inflation, even if it weighs on growth, is weighing on oil prices.

Brent lost 0.21% to 75.51 dollars a barrel and US light crude (West Texas Intermediate, WTI) lost 0.28% to 70.42 dollars.

(Report Corentin Chapron, edited by Blandine Hénault)

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