by Diana Mandia
(Reuters) – Wall Street is expected to rise on Friday and European stocks are up in mid-session, encouraged by a slowdown in euro zone inflation, which fell to its lowest level in three years, which is supporting hopes of a second cut in borrowing costs in the bloc in September.
New York index futures point to a 0.22% opening for Wall Street for the Dow Jones, 0.44% for the Standard & Poor’s-500 and 0.75% for the Nasdaq.
In Paris, the CAC 40 gained 0.37% to 7,669.42 points at around 11:21 GMT. In Frankfurt, the Dax advanced 0.19% and in London, the FTSE 100 gained 0.27%.
The EuroStoxx 50 index is up 0.14%, the FTSEurofirst 300 is up 0.26% and the Stoxx 600 is up 0.29% at 526.34 points, very close to the record of 526.54 points reached earlier on Friday.
European stock markets are heading for a positive close for August, rebounding from the dip seen at the start of the month, as figures show a slowdown in inflation in the eurozone and in individual countries within the bloc, including France and Spain. This supports investors’ expectations of another rate cut by the European Central Bank (ECB) on September 12.
The consumer price index calculated according to European standards (HICP) in the 20 countries sharing the euro fell to 2.2% at an annual rate this month, in line with expectations, and is now very close to the 2% target of the Frankfurt-based institution, thanks in particular to a decrease in energy prices.
In France, the consumer price index calculated according to French standards came out on Friday at 1.9% in August over one year, a rate below the ECB’s 2% target, a slowdown which follows those observed in Spain and Germany, according to data published on Thursday.
“Today’s data is entirely consistent with the need for another rate cut in September,” said Chris Scicluna, an analyst at Daiwa Capital Markets, who noted, however, that the ECB is still concerned about high services inflation.
Inflation is also on the minds of investors in the United States, who are awaiting the publication at 12:30 GMT of the July figures for the PCE price index, a measure preferred by the Federal Reserve (Fed), which is expected to announce in September the first cut in its rates since the big surge in prices in 2022 and 2023.
VALUES TO FOLLOW ON WALL STREET
On Wall Street, chipmaker Marvell beat expectations for quarterly revenue on Thursday, sending its shares up 9.2% in premarket trading.
Dell Technologies Inc raised its full-year revenue and profit forecast late Thursday, buoyed by demand for its AI-powered servers powered by Nvidia chips. Shares rose 6% in premarket trading.
VALUES IN EUROPE
In Europe, the prospect of a further reduction in borrowing costs is supporting the European real estate sector, which is up 1.67%.
In Paris, Crédit Agricole rose 2.2%, the best performance of the CAC 40, with HSBC having raised its recommendation to “buy”, while Spie (+4.4%) and Elis (+2.8%) are in the green, with JP Morgan having resumed monitoring of the two stocks with an “outperform” recommendation.
Elsewhere in Europe, Thyssenkrupp fell 0.15% after the announcement of the resignation of the chairman and CEO of the group’s steel division amid disagreement over the future direction of the division with the parent company.
RATE
Euro zone bond yields fell on Friday as signs of slowing inflation in the bloc reinforced expectations of an interest rate cut next month.
The yield on the ten-year German Bund fell 2.6 basis points to 2.2570%.
The trend is similar in the United States, where the yield on Treasuries of the same maturity fell by 1.1 basis points to 3.8557% while awaiting the PCE inflation figures.
CHANGES
Foreign exchange markets are fairly stable on Friday.
The dollar gained 0.07% against a basket of benchmark currencies, while the euro gained 0.01% to 1.1078 dollars.
OIL
Oil prices rose on Friday, heading for a weekly gain amid supply concerns over the situation in the Middle East and the disruption of much of Libya’s production.
The upward revision of the second quarter GDP in the United States on Thursday has also calmed fears of recession and, consequently, concerns about demand for crude oil.
Brent gained 0.23% to $80.12 per barrel and US light crude (West Texas Intermediate, WTI) gained 0.32% to $76.15.
(Written by Diana Mandiá, edited by Claude Chendjou)
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