PARIS (Reuters) – The main European stock markets are expected to be hesitant at the opening on Friday, with investors digesting numerous central bank decisions and positioning themselves before the publication of new indicators.

Futures contracts suggest a directionless opening for the Parisian CAC 40, compared to a rise of 0.27% for the FTSE in London, 0.1% for the Dax in Frankfurt, and 0.24% for the EuroStoxx 50.

Markets were disappointed by several central banks on Thursday, after the US Federal Reserve announced on Wednesday that it would keep rates at their current level and that they had probably peaked.

In fact, while the American central bank has adopted an accommodating tone, this is not the case for the European Central Bank, the Bank of England or the Swiss National Bank, which have each maintained their rates at their current levels Thursday, but have not yet mentioned rate cuts.

Central banks remain dependent on the Fed’s pace of easing: easing rates too early could create the risk of imported inflation through the weakening of local currencies against the dollar.

The swap markets nevertheless remain aggressive in their anticipations: operators are betting on a reduction in Fed rates from May (and for a growing majority of investors, from March) and from April for the ECB. The BOE would ease its rates from June.

On Friday, the markets will be focused on the publication of PMIs in the euro zone, from 08:15 GMT, and industrial production in the United States at 13:30 GMT.

VALUES TO FOLLOW:

A WALL STREET

The New York Stock Exchange ended higher on Thursday, the Dow Jones establishing itself for the second consecutive session at a historic peak, in a context of optimism on interest rates after the American Federal Reserve (Fed) let Wednesday assume a drop in borrowing costs next year.

The Dow Jones index gained 0.43% to 37,248.35 points. The broader S&P-500 gained 0.26% to 4,719.55 points. The Nasdaq Composite advanced 19% to 14,761.56 points.

IN ASIA

The Tokyo Stock Exchange ended up on Friday, in the wake of Wall Street and supported by a pause in the rise of the yen. The Nikkei index gained 0.87% to 32,970.55 points and the broader Topix gained 0.51% to 2,333.21 points.

Stocks of automakers benefited from the decline in the yen, with Toyota ending up 1.13%, Nissan up 2.94% and Subaru up 4.51%.

Chinese indices finished mixed despite a rebound in industrial activity and services. The Shanghai SSE Composite dropped 0.56%, the CSI 300 0.31%, the Hong Kong Hang Seng index jumped 2.27%.

RATE

US yields are up slightly after collapsing on Thursday following the Fed’s decision.

The ten-year Treasury yield rose 2.4 bp to 3.9465%, while the two-year rate rose 3.1 bp to 4.4218%.

The German ten-year yield climbs 1.5 bp to 2.14%, while that of the two-year rate advances 5.5 bp to 2.616%.

CHANGES

The foreign exchange markets are sluggish and digesting the numerous central bank decisions taken on Wednesday and Thursday.

The dollar gains 0.01% against a basket of reference currencies, but remains close to its lowest in four months, while the euro loses 0.05% to 1.0986 dollars, and the pound sterling 0.03 % to 1.2762 dollars.

In Asia, the yen eroded by 0.06% to 141.96 yen per dollar, while the Australian dollar was stable at $0.6699.

OIL

Oil is up slightly, supported by encouraging forecasts from the International Energy Agency which has revised upwards its demand growth forecasts for 2024, to 1.1 million barrels per day.

Brent nibbles 0.37% to $76.89 per barrel, American light crude (West Texas Intermediate, WTI) gains 0.35% to $71.83.

(Written by Corentin Chappron, edited by Tangi Salaün)

Copyright © 2023 Thomson Reuters