by Diana Mandia
PARIS (Reuters) – The main European stock markets are expected to rise at the opening, although caution remains in order as investors digest higher than expected US inflation figures and France’s finance bill , which is also awaiting Fitch’s decision on its credit rating later today.
According to the first available indications, the Parisian CAC 40 could gain 0.13% at opening.
Futures contracts signal an increase of 0.7% for the Dax in Frankfurt, 0.2% for the FTSE in London and 0.1% for the EuroStoxx 50.
The stock markets should start the last session of the week in the green, after the losses of the day before, even if investors will remain on their guard by evaluating the American inflation figures slightly higher than expected, while the The number of jobless claims has increased, a scenario that raises questions about the US economy and monetary policy.
Atlanta Fed President Raphael Bostic said Thursday he would be “completely comfortable” with rates remaining at their current level at the institution’s next meeting.
Traders estimate an 83% chance that the Fed will cut rates by 25 basis points next month and a 17% chance that it will leave them unchanged.
“We believe the FOMC remains on track to continue its policy rate adjustment with a 25 basis point cut in November. But our forecast for further easing in December is now being called into question by firm readings of the growth and inflation,” JPMorgan analysts said.
Caution is also required on the eve of the budgetary policy announcements planned for Saturday in China, the absence of details on additional measures intended to support the world’s second largest economy having shaken the markets at the start of the week.
In France, the market has just learned, Thursday evening, of a draft finance law (PLF) for 2025 which provides for a budgetary effort of 60.6 billion euros via a reduction in public spending and increases in revenue. tax measures and which contains, among other things, a reduction in aid for the purchase of electric vehicles, a tax on plane tickets and an increase in the level of the tax on electricity.
The government also plans to implement an exceptional contribution on the profits of large companies with a turnover greater than or equal to one billion euros, or around 400 companies, as well as a tax on share buybacks of listed companies whose turnover exceeds one billion euros.
“Overall, given that most French financial stocks have underperformed by around 5-6% since mid-September, we consider the impact of the budget to be benign,” report analysts at JP Morgan in a note, adding that the impact of the tax increase for French banks will be “limited”.
Markets will also monitor Fitch’s decision on France’s credit rating later today.
On today’s macroeconomic agenda, investors are awaiting the publication of final German inflation figures and monthly British GDP data, while in the United States, the major American banks begin publishing their quarterly results on Friday.
VALUES TO FOLLOW:
A WALL STREET
The New York Stock Exchange ended lower on Thursday after the publication of data showing inflation higher than expected while the number of jobless claims in the United States increased, fueling questions about the American economy and politics monetary.
The Dow Jones index lost 0.14%, the broader S&P-500 lost 0.21% and the Nasdaq Composite fell 0.05%.
IN ASIA
Asian stock markets are heading for their first weekly loss in five weeks, as the lack of details on economic stimulus measures has spoiled the mood of markets, which eagerly await the details of Beijing’s recovery plan scheduled for this weekend .
The CSI 300 index of large caps from mainland China fell by 1.49%, while the Shanghai SSE Composite ….. -1.19%.
The blue-chip CSI300 index .CSI300 fell 1.9% at midday, while the Shanghai Stock Exchange Composite Index lost 1.6%.
The Hong Kong Stock Exchange is closed on Friday due to a public holiday.
In Japan, the Nikkei index gained 0.61%, supported by the gains of Fast Retailing, the owner of the Uniqlo clothing chain, and stocks linked to semiconductors.
RATES / EXCHANGES
US Treasury bond yields fell slightly on Friday after rising on Thursday in reaction to data on inflation and the job market in the United States.
The yield on ten-year Treasuries dropped 2.7 basis points to 4.0688% and that of its two-year counterpart lost 2.5 basis points to 3.9743%.
In the foreign exchange market, the dollar lost 0.09% against a basket of benchmark currencies, with signs of weakness in the labor market suggesting that the Fed will likely continue to cut interest rates.
The euro is stable at 1.0934 dollars.
OIL
Oil prices eased on Friday after an increase of 4% on Thursday against a backdrop of increased fuel consumption in the United States due to the passage of Hurricane Milton and supply risks in the Middle East.
Brent fell 0.29% to $79.17 per barrel and American light crude (West Texas Intermediate, WTI) dropped 0.22% to $75.68.
(Written by Diana Mandiá, edited by Augustin Turpin)
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