by Diana Mandia

(Reuters) – Major European stock markets are expected to be directionless at the opening on Friday, as higher-than-expected producer prices in the United States have lowered expectations on the number and timing of Federal Reserve rate cuts (Fed) and pushed bond yields higher.

Futures contracts report a stable opening (+0.01%) for the CAC 40, and a small decline (-0.07%) for the Dax in Frankfurt and for the FTSE in London (-0.06%). The Stoxx 600 should open without much change.

European markets gave up initial gains on Thursday after a series of record highs in recent sessions as US producer price figures showed stronger-than-expected inflationary pressures, casting doubt on the timing of cuts Fed interest rates.

The report follows a rise in consumer prices noted at the start of the week which had already raised concerns.

“At the margin, price pressures appear more stubborn, with the disinflation process taking longer than expected,” said Kyle Rodda, senior markets analyst at Capital.com.

While policymakers at the European Central Bank (ECB) continue to align on a rate cut in June, they expressed divergent views on Thursday on the timing and pace of new measures.

In terms of macroeconomic indicators, attention remains focused on the United States on Friday, with the publication of February industrial production figures and the first estimate of the University of Michigan’s household morale index expected more late in the day.

VALUES TO FOLLOW IN EUROPE:

A WALL STREET

The New York Stock Exchange ended down on Thursday, weighed down by the decline in the semiconductor sector, while the acceleration of producer prices in the United States revived concerns about inflation.

The Dow Jones index lost 0.35%, the broader S&P-500 lost 0.29%, and the Nasdaq Composite fell 0.30%.

The semiconductor index lost 1.8%, in the wake of Nvidia’s 3.2% decline, as investors favored profit-taking after recent large gains.

IN ASIA

In Tokyo, the Nikkei ended down 0.26%, penalized by technology stocks in the wake of Wall Street the day before.

Operators also continue to position themselves cautiously before the meeting of the Bank of Japan (BOJ) which will take place next week. Japanese Finance Minister Shunichi Suzuki said Friday that the country’s economy is no longer in deflation and that a strong trend toward rising wages is emerging.

In China, the Shanghai Stock Exchange Composite Index increased by 0.54%, and the CSI 300 of large caps by 0.22%.

The Hong Kong Stock Exchange lost 1.53% after the country’s central bank left one of its key rates unchanged.

The fall in new housing prices for the eighth consecutive month in February also pulled down the real estate sector.

RATES/EXCHANGES

US bond yields, which saw their biggest rise in three months on Thursday due to concerns about rates, fell slightly on Friday. That of ten-year Treasuries drops 2 basis points to 4.27% and that of two years 1 bp to 4.68%.

In Europe, the German ten-year yield increased by 2 bps to 2.43%, and that of the two-year rate by 1.4 bps to 2.89%, after the American inflation figures.

The dollar, which recorded its best day in more than a month on Thursday, gained 0.04% against a basket of reference currencies, while the euro lost 0.02% to 1.0879 dollars.

OIL

Oil prices fell slightly on Friday but are on track to gain almost 4% over the week, stimulated by forecasts from the International Energy Agency, which revised upwards its oil demand forecasts for 2024, and by the unexpected drop in American stocks.

The barrel of Brent fell by 0.18% and that of American light crude oil (WTI) lost 0.16%.

MAIN ECONOMIC INDICATORS ON THE AGENDA OF MARCH 15

COUNTRY GMT INDICATOR PERIOD PREVIOUS CONSENSUS

07:45 FR HICP consumer prices February +0.9% +0.9%

(final)

– over one year +3.1% +3.1%

1:15 p.m. USA Industrial production February +0.0% -0.1%

– over one year na +0.03%

2:00 p.m. USA Household morale index March 76.9 76.9

from the University of Michigan

(1st estimate)

(Written by Diana Mandiá, edited by Blandine Hénault and Kate Entringer)

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