by Claude Chendjou

PARIS (Reuters) – Major European stocks are expected to fall on Friday at the opening for the final session of a week dominated by nervousness over stubborn inflation and high interest rates that cloud the outlook for economic conditions. world.

According to the first indications available, the CAC 40 in Paris should lose 0.55% at the opening, the Dax in Frankfurt 0.62% and the FTSE 100 in London 0.23%. The EuroStoxx 50 index is expected to fall by 0.44%.

Questions about the evolution of interest rates are fueled mainly by the statements of the President of the American Federal Reserve (Fed) Jerome Powell, who underlined this week, twice before Congress, the need to continue monetary tightening started in March 2022 despite the risks for employment and the economy.

Three central banks in Europe, the Swiss National Bank (SNB), the Norges Bank and the Bank of England (BoE) also raised their respective key rates on Thursday, while warning that other increases were in the offing. preparation.

These expectations of an increase in the cost of credit are weighing on investor morale and increasing uncertainty as the market is also awaiting the first monthly data on PMI activity in Europe and the United States on Friday.

“The situation we’ve seen globally over the past couple of weeks is that the Fed is going to raise (rates) more and it’s going to take longer to fix this problem of persistent inflation,” Damian said. Rooney, broker at Argonaut.

AT WALL STREET

The New York Stock Exchange regained some momentum Thursday after three sessions of losses, supported by a renewed appetite for growth stocks.

The Dow Jones index ended stable (-0.01% to 33,946.71 points) mainly due to the decline in industrial and financial stocks.

But the S&P-500 gained 0.37% to 4,381.89 points, driven by Amazon (+4.26%) or Apple (+1.65%), while the Nasdaq Composite advanced more significantly (+0 .95%) at 13,630.61 points.

Spirit AeroSystems plunged 9.4% as the aerospace parts supplier announced it was suspending production due to a strike at a Kansas factory. Boeing lost 3.05%.

Accenture fell 1.89% as the IT consultancy said it expects revenue for the current quarter to fall below Wall Street expectations.

VALUES TO FOLLOW IN EUROPE:

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index ended down 1.45% at 32,781.54 points and the broader Topix fell 1.38% at 2,264.73 points.

Core inflation in Japan exceeded expectations in May (+3.1%), rising 3.2% over one year, the highest in 42 years. Even if it shows a slowdown compared to April (+3.4%), this should increase the pressure on the Bank of Japan (BoJ) to abandon its ultra-accommodating policy.

The MSCI index comprising stocks from Asia and the Pacific (excluding Japan) dropped 1.3% and is heading for a loss of 4.2% over the whole week, the worst in nine months.

In China, where the markets were closed on Thursday for a public holiday, the Shanghai SSE Composite fell 1.31% on Friday and the CSI 300 lost 1.53%.

EXCHANGES/RATES

The dollar advanced Friday by 0.27% against a basket of benchmark currencies and is heading for its best weekly performance in a month, supported by risk aversion.

The euro is displayed at 1.0927 dollars (-0.26%) and the pound sterling at 1.2712 dollars (-0.27%).

The Japanese currency is trading at 142.90 yen to the dollar, a nearly seven-month low against the greenback.

The Turkish lira hit an all-time low of 25.59 to the dollar after the central bank raised interest rates on Thursday below expectations.

On the bond market, the yield on ten US Treasury bills fell slightly on Friday, by two basis points, to 3.7852%, after having taken 7.6 points the day before. Its German equivalent also yields two points, at 2.467%.

OIL

The oil market is giving ground on Friday and heading for a weekly decline of more than 3% amid fears for demand in the face of a likely continuation of monetary tightening by the major central banks.

Brent lost 1.09% to 73.33 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.19% to 68.68 dollars.

(Written by Claude Chendjou, edited by Nicolas Delame and Blandine Hénault)

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