by Diana Mandia
(Reuters) – Wall Street is expected to rise on Friday and most European stock markets advance slightly at mid-session after the reduction in interest rates announced the day before by the European Central Bank (ECB) in a context of persistent uncertainty over to the economic health of the euro zone.
New York index futures signal Wall Street opening up 0.14% for the Dow Jones, 0.36% for the Standard & Poor’s-500 and 0.8% for the Nasdaq.
In Paris, the CAC 40 gained 0.13% to 7,430.26 points around 12:46 GMT. In Frankfurt, the Dax advanced by 0.10% and in London, the FTSE 100 by 0.03%.
The EuroStoxx 50 index is up 0.23%, but the FTSEurofirst 300 loses 0.22% and the Stoxx 600 loses 0.27%.
European stock markets rose mid-session, albeit hesitantly, in the final session of a turbulent week in which investors had to digest updates on China’s stimulus measures, data on inflation in the United States and the Eurozone, and a further rate cut of 25 basis points from the ECB.
As expected, the Frankfurt institution cut interest rates on Thursday for the fourth time since the start of the year, leaving the door open for further cuts as economic growth is affected by political instability in the bloc and by the threat of a new trade war with the United States.
According to François Villeroy de Galhau, governor of the Banque de France and member of the Frankfurt institution, the ECB will make further interest rate cuts next year and is “comfortable” with the forecast in this regard. financial markets for 2025. Traders expect rate cuts of 115 basis points by the end of next year.
“This is consistent with the new projections from ECB economists, with a deteriorating economy in recent months and growth revised downward for this year and next year,” underlines LBP AM in a note published Friday.
On the political front, Emmanuel Macron ended a week of suspense on Friday by appointing centrist François Bayrou as Prime Minister with the tough mission of restoring political stability in France in a degraded economic context.
Investors are also digesting several indicators published Friday morning reflecting an unexpected contraction of the British economy in October and a greater than expected drop in German exports.
In this context, caution remains in order as the Federal Reserve (Fed) meets next week. VALUES TO FOLLOW AT WALL STREET
American aircraft manufacturer Boeing gained 1% in pre-opening after revealing plans to spend a billion dollars (953.11 million euros) to support increased production of its 787 Dreamliner.
VALUES IN EUROPE
On the Paris Stock Exchange, Casino, Eutelsat and Euroapi, which will leave the SBF 120 on December 23, lost between 0.83% and 2.3%, compared to an increase of 0.19% for the SBF 120 at the same time, while that Planisware, Robertet and Medincell, which will join the index the same day, progress between 0.7% and 4.9%.
Elsewhere in Europe, the German reinsurer Munich Re rose 5.5% after announcing its outlook for 2025.
Novo Nordisk fell by 2.5%, weighing on the STOXX 600, while according to a Reuters report the British are increasingly choosing Eli Lilly’s Mounjaro treatment against obesity rather than the Danish laboratory’s Wegovy.
RATE
Euro zone bond yields rose on Friday after the ECB, which cut rates on Thursday for the fourth time this year, said it remained vigilant on inflation, and as markets braced for a reduction in Fed interest rate next week.
The ten-year German Bund yield rose 5.3 basis points to 2.2430%. The two-year for its part advances by 3.5 basis points to 2.0460%
In France, where President Emmanuel Macron named François Bayrou as prime minister on Friday, bond yields are also rising. The risk premium required by investors to hold French debt rather than German Bunds, which had reached 90 bp in early December due to political uncertainty, was stable around 77 basis points on Friday after the announcement.
The ten-year OAT yield increased by 5.6 basis points to 3.0170%.
In the United States, the yield on ten-year Treasuries gained 2.7 basis points to 4.3514% due to the reduction in bets of a fall in American interest rates for 2025.
CHANGES
The dollar lost 0.17% against a basket of benchmark currencies but is heading towards its best weekly performance in a month, as investors have priced in the possibility that the Fed will reduce rates more slowly in 2025.
The euro advances 0.45% to 1.0514 dollars.
The pound sterling fell 0.05% to $1.2662 after a surprise contraction in economic activity in the United Kingdom.
OIL
Crude prices are rising, heading for their first weekly rise since late November, as tougher EU sanctions on Russia and possible similar measures by the United States United States have heightened concerns about supply.
Hopes that Chinese stimulus measures announced this week could boost demand are also supporting prices.
Brent gained 0.82% to $74.01 per barrel and American light crude (West Texas Intermediate, WTI) gained 0.87% to $70.63.
NO MORE MAJOR INDICATOR ON THE AGENDA FOR DECEMBER 13
(Written by Diana Mandiá, edited by Blandine Hénault)
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I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
