by Blandine Henault
Paris (Reuters) – The main European scholarships are expected on low variations on Friday at the opening, pending the speech of the president of the Federal Reserve (Fed) Jerome Powell at the Jackson Hole symposium.
The term contracts report a drop of 0.08% for the Parisian CAC 40, by 0.18% for the Dax in Frankfurt, 0.04% for the FTSE in London and 0.11% for the Stoxx 600.
Investors are waiting to know if Jerome Powell, who will be expressed at 2:00 p.m. GMT, will give clues to the upcoming trajectory of American interest rates while recent data on the employment front have fueled anticipations of a drop in loan costs in September.
The “minutes” of the Fed, published on Wednesday, however, somewhat questioned these anticipations. The report of the last monetary policy meeting of the Central Bank showed that only two Fed officials openly pleaded for a drop in rates last month and that the other FOMC members remained concerned about inflation.
Market operators estimate 75% the probability of a drop in Fed rates in September, according to the CME Fedwatch barometer, compared to 82.5% on Thursday.
The most likely scenario is that Jerome Powell gives “no definitive index” on what the Fed will do pending crucial data on job creations and inflation, observes Carol Kong, an economist at Commonwealth Bank of Australia in Sydney.
“Given the market situation, the risk lies in a stronger US dollar, especially if Jerome Powell calls into question the current expectations of a drop of 25 basic points”.
A Wall Street
The New York Stock Exchange finished down Thursday, investors awaiting the speech of the president of the Fed, Jerome Powell, during the Jackson Hole symposium on Friday, while Walmart displayed quarterly results deemed disappointing.
The Dow Jones index sold 0.34% to 44,785.50 points. The larger Standard & Poor’s 500 lost 0.40% to 6,370.17 points.
The Nasdaq Composite fell on its side from 0.34% to 21,100.312 points.
The term contracts on the three clues prefigure a slight withdrawal to the opening for the time being.
In Asia
The Nikkei index of the Tokyo Stock Exchange increased by 0.05% at the end of a volatile session.
In China, the increase in values ​​related to artificial intelligence (IA) has enabled the stock market indices to receive new highests for ten years and to be on the way to their best week in almost nine months.
The composite index of the Shanghai Stock Exchange increased by 1.05%, a peak since August 2015. It has been winning 2.7% over the week, its best weekly performance since November 2024.
The CSI 300 of large capitalizations advances by 1.66%.
RATE
The yield of Treasuries at ten years is stable, at 4.327%, after having progressed by almost four base points the day before, helped by the decline in anticipation of drop in Fed rates in September.
In the process, the yield of Japanese sovereign bonds at ten years old touched a higher 17 years.
In Europe, the rate of the German Bund at ten years, reference for the euro zone, is unchanged, at 2.754%.
Changes
The dollar is strengthening (+0.14%) in front of a basket of reference currencies in the wake of the rise in Treasuries yields and awaiting Jackson Hole’s speech.
The euro sells 0.14% to 1.1588 dollars.
The Japanese yen fell 0.1% against the dollar and is moving towards a weekly drop by 1%. The underlying inflation in Japan has slowed down for the second consecutive month in July, but remained above the 2% target of the central bank, which reinforces market expectations for a new increase in interest rates in the coming months.
OIL
The prices of the crude evolve little, the hope of a very next resolution of the conflict in Ukraine having faded, which increases the risk premium.
“It is difficult to organize a Putin-Zelensky summit, while discussions on possible security guarantees come up against obstacles,” underline ING analysts in a note.
“The less likely a ceasefire seems likely, the greater the risk of (American) sanctions against Russia is high.”
The barrel of Brent increased by 0.18% to 67.79 dollars and that of the American light crude (WTI) gained 0.2% at 63.65 dollars.
(Written by Blandine Hénault, with Reuters market teams)
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