PARIS (Reuters) – The main European stock markets are expected to rise at the opening on Friday, in a context of caution before the publication of the American employment report and reassessment of the Federal Reserve’s monetary policy.
The first available indications indicate that the Parisian CAC 40 would advance by 0.22% at the opening. Futures on the FTSE in London suggest a gain of 0.32%, compared to 0.28% for the Dax in Frankfurt, and 0.24% for the EuroStoxx 50.
The markets are suspended for the publication of the American employment report at 12:30 GMT, which will conclude a series of indicators published this week which have highlighted the persistent tensions on the American labor markets.
This report will give a more complete and definitive picture of the state of labor markets in September, and a surprise – up or down – has the potential to trigger a violent market reaction.
Volatility has been very high in recent days, with the week opening with a bond crash before the publication of ADP data on job creations sharply reversed the trend on Wednesday.
However, if still tense labor markets support the Fed’s restrictive discourse, the levels reached by sovereign yields – at their highest since 2007 – are now high enough to justify the end of rate increases: 75 basis points of reductions rates are integrated by the end of 2024 while the peak rate is only seen at 5.43%, according to the money markets.
This positioning is more dovish than that of the Fed and provides some relief for risky assets, but could run into a stronger-than-expected jobs report.
A WALL STREET
The New York Stock Exchange ended slightly lower on Thursday, while investors favored caution on the eve of the publication of a monthly report on the labor market in the United States which could give them indications on the contours of the continuation of monetary policy.
The Dow Jones index fell 0.03%, or 9.98 points, to 33,119.57 points. The broader S&P-500 lost 5.56 points, or 0.13%, to 4,258.19 points. The Nasdaq Composite fell 16.18 points (0.12%) to 13,219.83 points.
IN ASIA
Japanese markets are hesitant, under pressure from semiconductor-related stocks and in a context of caution ahead of the US employment report. The Nikkei fell by 0.25% to 30,998.80 points, the Topix nibbled 0.19% to 2,268 points.
Rate-sensitive growth stocks fell, with semiconductor test equipment maker Advantest dropping 1.77%, and semiconductor equipment maker Tokyo Electron shedding 1.77%. Hong Kong indices are rising in the wake of global stocks, with traders positioning themselves before the reopening next week of all Chinese stock exchanges. The Hong Kong Hang Seng index rose 1.77%.
CHANGES
The dollar posted small gains after a series of economic data showed the resilience of the US economy this week, with caution ahead of the jobs report capping the currency’s advance.
The dollar advanced 0.12% against a basket of reference currencies, while the euro lost 0.09% to 1.0539 dollars, and the pound sterling 0.12% to 1.2175 dollars.
In Asia, the yen weakened by 0.18% to 148.76 yen per dollar, while the Australian dollar eroded by 0.06% to $0.6365.
RATE
Yields on US securities are stable, in a context of wait-and-see and reassessment of the Federal Reserve’s rate trajectory.
The ten-year Treasury yield is stable at 4.7234%, while the two-year rate is stagnating at 5.0328%.
OIL
Oil is up slightly, with investor caution ahead of the jobs report limiting gains.
Brent advanced 0.15% to $84.2 per barrel and American light crude (West Texas Intermediate, WTI) gained 0.26% to $82.52.
(Written by Corentin Chappron, edited by Kate Entringer)
Copyright © 2023 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
