by Diana Mandia
(Reuters)-Wall Street is expected to rise and most European scholarships are progressing slightly on mid-session on Friday, ending towards a solid weekly gain thanks to the technological values and anticipations of a drop in interest rates in the United States, despite the uncertainty linked to the pursuit of the American “Shutdown”.
After having recorded new closing records on Thursday, carried by the enthusiasm of investors for AI, the New York indices are oriented towards an increased opening, the future indicating 0.21% for the Dow Jones, 0.16% for the Standard & Poor’s-500 and 0.16% for the Nasdaq.
In Paris, the CAC 40, which exceeded earlier this week the 8,000 points, a level it had no longer reached since last March, wins 0.05% to 8,060.69 points around 11:19 GMT, however reducing its start of session earnings. In Frankfurt, the Dax fell by 0.07% and in London, the FTSE 100 takes 0.60%.
The Eurostoxx 50 index advance 0.07%, the FTSEUROFIT 300 takes 0.27%. The Stoxx 600, which is also on the way to record its best week since the end of May, has taken 0.32%.
Investors have kept a cold head this week despite budgetary disagreements in the United States, where the Shutdown of the Federal Administration continues, focusing on hopes around the AI and the world technological sector, after a series of announcements deemed promising, as well as the conviction that the Federal Reserve (Fed) will continue to lower its rates in 2025.
The prospects for lightening the impact of customs duties in the pharmaceutical sector thanks to agreements with the White House, in the wake of that announced with Pfizer this week, also contributed to the increase in clues on both sides of the Atlantic.
Operators, however, will not be able to access what is probably the most followed macroeconomic information by the market at the moment: monthly employment figures in the United States, which should be published this Friday, but which the closure of the US administration will prevent.
Paradoxically, Christopher Hodge, an economist at Natixis, stresses that the absence of these data reinforces, to a certain extent, bets on a new drop in American interest rates this month.
“The basic scenario (of a drop in rates) is the default scenario in the absence of new information,” he said, adding that the markets have great experience in the management of closings in the United States.
The traders anticipate a drop of 25 basic points of the Fed key rate later this month and at least four drops by the end of 2026.
As private sector data is not affected by the closure of the US government, the Institute for Supply Management (ISM) services index should be published as planned on Friday at 2:00 p.m.
In Europe, investors learned on Friday that the growth in the services sector has accelerated slightly in September to reach its highest level for eight months.
Political uncertainty in France, however, continues to weigh in the euro area, and investors closely follow negotiations for the new budget which will be presented this month for the French government. According to two sources close to Prime Minister Sébastien Lecornu, he would have proposed to the Socialist Party (PS) a tax on fortune excluding professional goods in order to obtain his support.
The values to follow at Wall Street
Values in Europe
In Paris, Legrand takes 0.49% after announcing on Thursday evening the acquisition of the American group specializing in the burden benches with power solutions. Banks advance by 1.01%, Raiffeisen leading the increase with an increase of 6.2% after the Financial Times reported that the EU was planning to remove the sanctions on the active assets in order to compensate the Austrian bank.
The technology sector marks a break on Friday (-0.16%), but it goes towards a weekly increase of 4.7%.
Abn Amro advances 1.7%, helped by Goldman Sachs, who noted his recommendation on the value to be “Buy”.
RATE
The bond markets are calm on Friday. Treasuries’ yields at ten years and two years displayed both slightly increased to 4.0922% and 3.5512%, respectively.
In Europe, that of the German Bund at ten years is 2,7009%, also slightly increased, while the two years fell from 0.5 base points to 2,0082%.
In France, OAT’s yield to ten years drops from 0.7 base points to 3.5145%.
Changes The Dollar has been heading for its worst weekly performance since the end of July, the closure of the United States government that increased uncertainty.
The dollar cedes 0.07% against a basket of reference currencies, while the euro takes 0.18% to 1.1736 dollars.
OIL
Oil prices have increased slightly, but have been about to record their strongest weekly decline for more than three months due to the prospects of an increase in OPEC+supply.
Brent takes 0.55% at 64.46 dollars per barrel and light American crude (West Texas Intermediate, WTI) 0.53% to 60.82 dollars.
Metals
Gold is about to record its seventh consecutive week of winnings at 3.863 dollars per ounce, after reaching a new record of 3.896 dollars on Thursday.
(Some data may accuse a slight offset)
(Written by Diana Mandiá, edited by Augustin Turpin)
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