by Claude Chendjou

PARIS (Reuters) – The main European stock markets, apart from Frankfurt, ended lower on Friday amid fears of persistent inflation in light of recent wage pressures in the euro zone, while Wall Street was up at mid-session , taking advantage of a technical rebound after the decline the day before.

In Paris, the CAC 40 declined by 0.09% to 8,094.97 points. The British Footsie dropped 0.22%. The German Dax, on the other hand, gained 0.02%.

The EuroStoxx 50 index fell by 0.03%, the FTSEurofirst 300 by 0.20% and the Stoxx 600 by 0.19%.

This last index, which lost 0.43% over the whole week, was penalized on Friday mainly by the new technologies (-0.42%) and community services (-1.27%) compartments.

Caution on risky assets was accompanied by tensions in the bond sector where the yield on the two-year German Bund hit a six-month high on Thursday.

A development following the publication of PMI indices showing activity at its fastest pace in a year in May and an acceleration in wage growth in the monetary bloc in the first quarter.

Barclays estimates on Friday that the Bank of England (BoE) will reduce the cost of its borrowings only from August, while Danske Bank only sees two rate cuts in the euro zone this year, instead of three initially. .

VALUES IN EUROPE

Renault took 5.20%, the car manufacturer having announced a share buyback plan and UBS having raised its recommendation on the group from “sell” to “neutral”. Compagnie des Alpes jumped 8.41% after the group published an increased quarterly net result and an increase in its Ebitda outlook for the financial year.

The British energy network management group National Grid lost another 3.71% after a fall of more than 10% linked to the announcement of a fundraising of around 7 billion pounds.

A WALL STREET

At the close in Europe, the Dow Jones advanced by 0.25%, the Standard & Poor’s 500 by 0.68% and the Nasdaq by 1.04%, rebounding from a session in the red on Thursday while the Investors are positioning themselves as the long weekend linked to “Memorial Day” approaches and the unofficial start of summer in the United States.

“We are seeing some relief after yesterday’s sharp decline,” comments Peter Cardillo, chief market economist at Spartan Capital Securities.

The publication of the University of Michigan survey, which shows a deterioration in American household morale in May, is also good news. This indicator contrasts with Thursday’s statistics which showed a vigorous American economy while the Federal Reserve (Fed) has been working since March 2022 to curb demand to bring down inflation.

Over the course of the week as a whole, however, the S&P 500 and the Dow are on the verge of ending their streak of consecutive gains, a sign of a certain caution among investors.

CHANGES

The dollar fell 0.34% on Friday against a basket of reference currencies, but should record a gain of 0.6% over the week as a whole, the largest since mid-April.

The euro advances by 0.35%, to 1.0851 dollars.

The pound sterling is trading at $1.27435 (+0.35%), despite UK retail sales falling 2.3% month-on-month in April.

RATE

The yield on the ten-year German Bund ended down around two basis points, at 2.583%, but it reached 2.618% during the session, its highest level since April 26.

Traders currently expect the ECB to cut rates by 57 basis points this year, compared to a 75-point cut anticipated in mid-May.

The yield on ten-year US Treasury bonds is stable, at 4.4748%, while the financial markets only anticipate one rate cut from the Fed this year, far from the six reductions projected at the start. of year.

OIL

The two main oil benchmarks rise on Friday but could show a fifth consecutive weekly decline over the whole week amid fears of high interest rates likely to weigh on demand.

At the close of trading in Europe, Brent rose 0.92% to $82.11 per barrel and American light crude (West Texas Intermediate, WTI) rose 1.07% to $77.69.

(Written by Claude Chendjou, edited by Sophie Louet)

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