by Blandine Henault
PARIS (Reuters) – The main European stock markets are expected to rise at the opening on Friday to end a good week for the stock markets after in particular the status quo of the Federal Reserve which caused a fall in bond yields.
Futures contracts report an increase of 0.4% for the CAC 40, 0.37% for the Dax in Frankfurt, 0.35% for the FTSE in London and 0.45% for the STOXX 600.
The pan-European index is heading towards its best weekly performance (+3.3% so far) since the end of March as investors welcomed the slowdown in inflation in Europe, which reinforces the pause of the European Central Bank (ECB) on raising its rates, and the status quo also adopted by the American Federal Reserve (Fed) and the Bank of England.
“Markets are increasingly confident that interest rates in the United States have reached a peak,” ANZ analysts point out in a note.
There is still one last major meeting this Friday, with the publication of the official report on American employment. Economists polled by Reuters expect 180,000 job creations in the non-agricultural sector in October, which would mark a clear slowdown compared to the previous month.
VALUES TO FOLLOW:
Societe Generale published its third quarter results marked by a resistance of its investment banking but by a sharp decline in its activities in retail banking in France and depreciations which weighed on the net result.
A WALL STREET
The New York Stock Exchange ended sharply higher on Thursday, the day after the meeting of the Federal Reserve (Fed) which fueled hopes that the American central bank has completed its cycle of monetary tightening, while results and forecasts of companies added to investor optimism.
The Dow Jones index gained 1.70% to 33,839.08 points. The broader S&P-500 gained 1.89% to 4,317.78 points, its best session performance since April and its fourth consecutive session in the green.
For its part, the Nasdaq Composite advanced 1.78% to 13,294.19 points, its fifth session in a row in the green and its strongest daily increase since July.
Futures are reporting a mixed open on Friday, as Apple reported earnings after the close on Thursday. The consumer electronics giant published a quarterly sales forecast below expectations, which caused its stock to fall 3% in after-hours trading.
The Tokyo Stock Exchange is closed this Friday for a public holiday.
In China, the CSI 300 gained 0.84% and the Hong Kong Hang Seng index jumped 2.48% with the progression of technology stocks in the wake of the Nasdaq.
The yield on ten-year Treasuries stabilizes at 4.67% after having plunged by 20 basis points over the last two days following the Fed’s announcements and expectations of the end of the monetary tightening cycle.
In Europe, the yield on the German Bund of the same maturity is also stable, at 2.712% after a decline of almost ten basis points since Wednesday.
Same lull for the dollar, unchanged against a basket of reference currencies after having lost 0.7% the day before.
“Even if non-agricultural job creation in October comes out above expectations, this should not necessarily support calls for an increase in interest rates in December,” underlines Julien Lafargue, strategist at Barclays Private Bank. “The central bank seems more focused on inflation rather than employment and economic growth.”
The euro remains above $1.06. The single currency did not react to the larger than expected drop in German exports in September.
Oil prices continue to benefit from the widespread renewed appetite for risky assets, despite fears about Chinese demand.
A barrel of Brent gained 0.28% to $87.09 and that of American light crude (WTI) increased by 0.42% to $82.81.
(Contributing from Tom Westbrook and Ankur Banerjee and Rae Wee in Singapore, editing 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.