Fall in sight in Europe, inflation in the United States in the sights (updated) – archyde

by Marc Angrand

PARIS (Reuters) – Major European stock markets are expected to open in the red on Friday ahead of highly anticipated US inflation figures, which could influence Federal Reserve decisions and speeches next week.

Index futures suggest a decline of 0.48% for the CAC 40 in Paris, 0.58% for the Dax in Frankfurt, 0.46% for the FTSE 100 in London and 0.56% for the EuroStoxx 50.

The latter gained 3.14% over the first four sessions of the week and the CAC 40 3.59%.

The publication at 13:30 GMT of the monthly statistics of US consumer prices, the main macroeconomic meeting of the week, could elicit strong reactions five days from the Fed’s decisions.

Economists polled by Reuters expect the rise in the consumer price index (CPI) to accelerate further in November to 6.8% year-on-year from 6.2% in October, which marked already a high of 31 years.

Such a development would plead for an acceleration of the “tapering”, the reduction of the purchases of bonds of the central bank, and a rise of the rates earlier than anticipated so far.

“Inflation will accelerate. We therefore believe that this development means that a rate hike in March is very possible,” said Tom Porcelli, chief economist at RBC Capital for the United States. “The market estimates the probability of this assumption to be around 40%, but we now think it is a little higher.”

In Germany, the price increase calculated according to European standards was confirmed at 6% year-on-year in November.

A WALL STREET

The New York Stock Exchange ended lower Thursday after three consecutive sessions of increase, investors having opted for profit taking pending inflation figures in the United States.

The Dow Jones index lost 0.06 points to 35,754.69, the Standard & Poor’s 500 lost 33.76 points (-0.72%) to 4,667.45 and the Nasdaq Composite fell by 269.62 points ( -1.71%) to 15,517.37.

Index futures for now suggest a stable open.

In out-of-session trading after the close, Oracle has gained as much as more than 10% after raising its revenue and profit guidance for the current quarter.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index lost 1%, the decline in technology stocks in the wake of the Nasdaq having amplified the effect of the reflex of caution putting before US inflation.

In China, the Shanghai SSE Composite fell 0.18% and the CSI 300 0.46% after weaker than expected official statistics on bank credit and money supply.

Real estate values ​​are also weighing on the trend: in Hong Kong, the Hang Seng fell by 0.89% and Evergrande by 1.67% after the downgrade of its credit rating by Fitch.

CHANGES / RATES

The dollar gives up a little ground against the other major currencies (-0.02%) before the statistics of consumer prices and shows for the moment a marginal increase over the whole of the week, as on the two preceding ones.

The euro hovers around $ 1.13.

The yuan is regaining some ground against the greenback after suffering Thursday from the decision of the People’s Bank of China to raise banks’ foreign exchange reserve requirements for the second time since June.

In the government bond market, the yield on ten-year US Treasuries rose to 1.5128% after declining Thursday for the first time in four sessions.

In Europe, the ten-year Bund yield was virtually unchanged in early trading at -0.347%.

OIL

The oil market is down but this decline does not call into question the fact that it is heading towards its largest weekly increase since the end of August thanks to the ebb in fears related to Omicron.

Brent dropped 0.46% to $ 74.08 per barrel and US light crude (West Texas Intermediate, WTI) 0.32% to $ 70.71.

Both are showing for the moment an increase of more than 6% since last Friday after six consecutive weeks of decline.

(Written by Marc Angrand, with Tom Westbrook in Sydney, edited by Blandine Hénault)