Caution in sight on Wall Street, Europe is reducing its losses – archyworldys

by Blandine Henault

PARIS (Reuters) – Wall Street is expected in dispersed order on Friday and European stock markets reduced their losses at mid-session, caution prevailing at the start of the fourth quarter after a very heckled September.

New York index futures signal an opening down 0.1% for the Dow Jones but up 0.16% for the S&P 500 and 0.23% for the Nasdaq.

The more favorable orientation of US futures, which were sharply lower in trade in Asia, allowed indices in Europe to reduce their losses.

In Paris, the CAC 40 fell 0.25% to 6,503.91 around 11:30 GMT after having given up to 1.65% earlier in the session. In Frankfurt, the Dax lost 0.29% and in London, the FTSE lost 0.81%.

The pan-European FTSEurofirst 300 index fell 0.57%, the Eurozone EuroStoxx 50 0.22% and the Stoxx 600 0.37%, after hitting a low since mid-July.

The reasons for concern that weighed in September remain present, between the prospect of a tightening of the monetary policies of the major central banks, inflationary pressures and the financial difficulties of the Chinese group Evergrande, which could confirm the bad reputation of the month of October for the equity markets.

In the euro zone, inflation reached its highest level in 13 years in September and final PMI indicators for the region’s manufacturing sector showed that difficulties in the supply chain were starting to dampen activity.

VALUES TO FOLLOW AT WALL STREET

VALUES IN EUROPE

The most cyclical sectors such as basic resources (-0.94%) and banks (-1.15%) show the most marked declines.

Conversely, the more defensive sectors stand out, such as the media (+ 0.85%), real estate (+ 0.91%) or even “utilities” (+ 1.39%).

In Paris, EDF gained 5.41%, investors showing themselves reassured after the decision of the French government to cap, without freezing them, the electricity prices which will increase by 4% in February.

RATE

Risk aversion is pushing investors towards assets deemed to be safe havens, and in particular sovereign bonds. Demand is pushing bond yields lower, with the ten-year Treasuries rate falling nearly four basis points, falling back to 1.4858% after peaking at 1.567% on Tuesday.

In Europe, the yield of the German ten-year Bund yielded nearly five basis points, to -0.238%, and the French OAT fell in the same proportions, to 0.476%.

CHANGES

Favored both by its quality of safe-haven asset and the US Federal Reserve’s monetary tightening expectations, the dollar remains close to a one-year high hit the day before against a basket of benchmark currencies and is heading for its best week since June.

For its part, the euro is at its lowest since July 2020 against the dollar and is moving below the threshold of 1.16, at 1.1594. It is currently showing a decline of more than 1% over the week against the greenback.

OIL

Crude prices are moving down, ahead of a meeting of OPEC producers and their allies (Opec +) scheduled for Monday where they could discuss an increase in production, according to sources.

Beyond October, “an acceleration of the production of Opec + can not be excluded”, estimates Stephen Brennock, at the broker PVM. “The prospect of $ 80 oil does not suit the producer group.”

A barrel of Brent hit a peak Tuesday at $ 80.75, a three-year high, as soaring natural gas prices prompted some consumers to turn to oil.

It fell back to $ 78.17 on Friday (-0.18%). A barrel of US light crude lost -0.39% to 74.74 dollars.

(Edited by Sophie Louet)