by Blandine Henault

PARIS (Reuters) – The main European stock markets are expected to be slightly lower on Friday at the opening, caution should prevail before the interventions of Jerome Powell and Christine Lagarde, who respectively chair the Federal Reserve (Fed) and the European Central Bank (ECB), at the Jackson Hole meeting in the United States.

According to the first indications available, the Parisian CAC 40 could lose 0.33% at the opening. The Dax in Frankfurt would fall by 0.38%, the FTSE in London by 0.16% and the Stoxx 600 by 0.22%.

At the end of a week marked by a jump in bond yields against a background of longer-than-expected expectations of higher interest rates, the Jackson Hole symposium, which brings together the world’s major financial advisers, will be closely followed by the markets, which will look to it for indications on the trajectory of the monetary policies of the rich countries.

Jerome Powell will speak at 2:05 p.m. GMT on the economic outlook and Christine Lagarde is due to deliver a speech at 7:00 p.m. GMT.

“There’s no real reason for Powell to take a dovish tone, and that could mean a tough weekend for stocks and a jump for the dollar,” said Matt Simpson, market analyst at City Index.

CHANGES

The dollar touched a more than two-month high against a basket of benchmark currencies on Friday and is on course for its sixth straight week of gains ahead of Jerome Powell’s much-anticipated speech.

“The risk is that Powell’s message or tone is less restrictive than expected,” said Christopher Wong, currency strategist at OCBC in Singapore. “He doesn’t need to be dovish but a little less restrictive rhetoric could weaken the dollar.”

The euro fell 0.25% against the greenback, to 1.0781, the lowest since mid-June.

RATE

The yield of ten-year Treasuries gained more than a basis point, to 4.249%, after hitting its highest since 2007 at 4.366% on Wednesday.

Recent US data showed US economic activity holding up surprisingly well against the Fed’s tight monetary policy, fueling expectations that interest rates will stay high for an extended period.

“If it looks like the Fed is done with (rate) hikes, how long is it going to keep (them) at those levels? That’s the million-dollar question,” observes Tom Hopkins. , manager at BRI Wealth Management.

AT WALL STREET

The New York Stock Exchange ended lower on Thursday as nervousness ahead of Jerome Powell’s Jackson Hole speech outweighed the Nvidia effect after the release of record quarterly results.

The Dow Jones index fell 1.08% to 34,099.42 points. The S&P-500 lost 1.35% to 4,376.31 points. The Nasdaq Composite fell 1.87% to 13,463.97 points.

In values, Nvidia ended practically stable (+0.09%) after taking up 6.5% in session to reach a historic high.

IN ASIA

The Tokyo Stock Exchange fell 2.04% as the close approached, weighed down by the fall in heavyweights like Advantest and Tokyo Electron in the wake of American “tech”. The Nikkei is all the more prone to profit taking as it had lined up four consecutive bull sessions.

The general caution on the markets is also weighing on the Chinese stock markets, the CSI 300 falling by 0.48% and the Hang Seng in Hong Kong by 1.09%.

OIL

Crude prices are rising but are heading for a second consecutive weekly decline on fears about the Chinese economy and the strength of the dollar.

The barrel of Brent from the North Sea gained 0.35% to 83.65 dollars and that of American light crude (WTI) took 0.39% to 79.36 dollars.

(Written by Blandine Hénault, with contributions from Ankur Banerjee in Bangalore and Kevin Buckland in Tokyo)

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