Nervousness before inflation figures in the United States – archyworldys

by Marc Angrand

PARIS (Reuters) – Wall Street is expected to rise slightly but European stock markets are hesitant at mid-session Friday before the publication of monthly inflation figures in the United States, which could influence the decisions and the speech of the Federal Reserve after its meeting next week.

Futures contracts on the main New York indices show an increase of 0.32% for the Dow Jones, 0.42% for the Standard & Poor’s 500 and 0.41% for the Nasdaq.

In Paris, the CAC 40, at 7,007.33 points, is practically in equilibrium at 12:00 GMT, just like the FTSE 100 in London, while in Frankfurt, the Dax gains 0.2%.

The EuroStoxx 50 index gained 0.06% but the FTSEurofirst 300 fell as much and the Stoxx 600 lost 0.1%.

The latter keeps an increase of 3% since the beginning of the week and the ACC an increase of 3.6%; both therefore remain on track to record their best weekly performance since mid-March.

The Labor Department will publish at 13:30 GMT the monthly figures for consumer prices in the United States, which the Reuters consensus expects up 0.7% on a month and 6.8% year-on-year, therefore at the highest for over 30 years.

If it is not the preferred price measure by the Fed, the “CPI” index will necessarily be taken into account by the leaders of the central bank who are meeting next Tuesday and Wednesday to decide on the rhythm of the “tapering”, the reduction in securities purchases on the markets, and the provisional schedule for the rate hike in 2022.

“The markets are already preparing for the possibility of three rate hikes next year, so a ‘hawk’ Fed is already embedded in prices,” said Neil Wilson, analyst at Markets.com.

The decline in European values ​​is also explained by renewed concern about the dangerousness of the Omicron variant of the coronavirus. Oxford Economics has just reduced its growth forecasts for the euro zone for the fourth quarter and the first quarter of 2022 to 0.4% against 0.7%.

VALUES IN EUROPE

The largest sector decline in Europe is for the high technology compartment, whose Stoxx index fell 0.66% the day after the 1.71% decline in the US Nasdaq, the most exposed to the profit taking that marked the session on Wall Street.

In Paris, Dassault Systèmes (-1.73%) and Worldline (-1.26%) are among the most marked declines in the CAC 40.

In the leading pack of the Paris index, ArcelorMittal gained 1.61%, the basic resources sector (+ 0.25%) benefiting from speculation on a further easing of Chinese monetary policy.

The strongest advance of the EuroStoxx 50 is for Daimler, which gained 3.84% after the split of its heavy-duty subsidiary, Daimler Truck.

Also in Frankfurt, Bayer won 2.51% after a new legal decision favorable to the group in the United States in the case of the herbicide Roundup.

RATE

Yields on US Treasuries started to rise again as the inflation figures approached, erasing part of their decline from Thursday: the ten-year climbed to 1.5162%, the two-year (the most sensitive to inflation expectations) to 0.72%.

The rise is more limited in the European market, where the German ten-year yield is -0.33%. It had returned to -0.364% Thursday after information from Reuters on the debates within the European Central Bank (ECB) on asset purchases.

CHANGES

The dollar is gaining ground against other major currencies (+ 0.13%) before US inflation, the euro falling to 1.1268 against more than 1.13 at the start of the day.

As for emerging currencies, the yuan is picking up again after the fall caused on Thursday by the decision of the People’s Bank of China to raise banks’ reserve requirements.

OIL

On the downside at the start of the day, the oil market returned to the green to regain part of the ground ceded on Thursday and is heading towards its biggest weekly increase since the end of August.

Brent gained 0.9% to 75.09 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.01% to 71.66 dollars.

Both show an increase of more than 7% over the week after six weeks of decline.

(edited by Blandine Hénault)