by Blandine Henault

PARIS (Reuters) – The main European stock markets are expected to be on a stable note at the opening on Friday, after their progress the day before thanks to the drop in rates confirmed by the European Central Bank (ECB) and in a climate of wait-and-see attitude ahead of employment data in the United States.

According to the first available indications, the Parisian CAC 40 could lose 0.05% at the opening.

Futures contracts report a decline of 0.06% for the Dax in Frankfurt and increases of 0.15% for the FTSE in London and 0.04% for the Stoxx 600.

The ECB has joined the Bank of Canada, the Bank of Sweden and the Swiss National Bank in a new round of monetary easing and investors are hoping that the Federal Reserve (Fed) will join the movement soon – probably in September.

Recent indicators have shown a slowdown in the job market in the United States, a key element for inflation, which has reinforced expectations around the Fed. The official report on non-agricultural employment in the United States, which will be published at 12:30 GMT, will therefore be followed with great attention.

Economists polled by Reuters expect 185,000 job creations in May, after 175,000 the previous month, and an increase in average hourly wages over one month of 0.3%, after +0.2% in April.

“If we have a little weaker data (…) we could see the yield on 10-year Treasuries getting closer to the 4% level,” said Rob Carnell, head of research for Asia-Pacific at ING , which also forecasts in this scenario a general rise in stocks and a weakening of the dollar.

VALUES TO FOLLOW:

A WALL STREET

The New York Stock Exchange ended in mixed order on Thursday, with only the Dow Jones registering in the green while the S&P-500 and the Nasdaq recorded slight declines after their records the day before, investors having adopted a cautious position before the publication of the employment report.

The Dow Jones index gained 0.20% to 38,886.17 points. The broader S&P-500 lost 0.02% to 5,352.96 points and the Nasdaq Composite fell 0.09% to 17,173.12 points.

IN ASIA

The Tokyo Stock Exchange fell 0.24% as the close approached, affected by the decline in technology stocks and in a cautious context before next week’s meetings of the Fed and the Bank of Japan.

In China, the indices are penalized by information on Thursday from the Wall Street Journal according to which American parliamentarians have asked to prohibit two Chinese battery companies with links to Ford and Volkswagen from importing goods into the United States due to of their alleged use of forced labor.

This concerns Contemporary Amperex Technology (CATL) and Gotion High Tech, whose shares fell by 7.16% and 3.14% respectively on Friday.

The news overshadowed much better-than-expected data for China’s exports in May, which climbed 7.6% last month.

The composite index of the Shanghai Stock Exchange fell 0.32% and the CSI 300 of large caps lost 0.89%.

EXCHANGES/RATES

A wait-and-see attitude predominates among currency traders ahead of the data on American employment.

The dollar is trading near an eight-week low against a basket of benchmark currencies while the euro consolidates its gains from the day before after announcements from the ECB which offered little indication on the future trajectory of its Monetary Policy.

The yield on ten-year Treasuries gained two basis points, to 4.3025%, after having recorded six consecutive sessions of decline.

OIL

Crude prices regained ground on Friday but were heading towards a third consecutive weekly decline.

The barrel of Brent increased by 0.26% and that of American light crude oil (WTI) gained 0.32%.

(Written by Blandine Hénault, with Rae Wee in Singapore)

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