PARIS (Reuters) – European stock markets are expected to be uncertain on Friday, as crucial inflation indicators are expected during the session and the next meeting of the European Central Bank (ECB) looms.
According to the first available indications, the Parisian CAC 40 is up 0.06% at the opening. Futures on the FTSE in London suggest a directionless advance, compared to a decline of 0.14% for the Dax in Frankfurt, and an advance of 0.08% for the EuroStoxx 50.
Many leading indicators are expected during the session. The Eurozone inflation indicator is expected at 09:00 GMT, when the ECB meets next Thursday. The central bank has repeatedly insisted on the volatile nature of inflation over the coming months, but a figure higher than the consensus would nonetheless worry the markets, which are already positioning themselves for the meetings after June.
The ECB must indeed lower its rates at its next meeting, but its subsequent decisions will depend on the flow of data, which may have surprised on the rise in recent weeks.
The inflation indicator in France, which will be published before the opening at 6:45 a.m., could give a taste of the European figures and dictate the tone at the start of the session.
Investors will then focus on PCE inflation, the Federal Reserve’s favorite indicator of price dynamics, facing persistent inflation which has removed the prospect of rate cuts in 2024.
The pace of growth of the indicator is expected to be stable, up 2.7% year-on-year in May, as in April. However, the slightest surprise, upwards or downwards, would be likely to cause significant variations in markets suspended from the publication of these data.
AT WALL STREET
The New York Stock Exchange ended lower on Thursday, weighed down by the technology sector after disappointing forecasts from Salesforce, while investors also took into account data showing that the US economy grew more slowly than expected in the first quarter .
The Dow Jones index lost 0.86%, or 330.06 points, to 38,111.48 points. The broader S&P-500 lost 31.47 points, or 0.60%, to 5,235.48 points. The Nasdaq Composite fell 183.50 points (1.08%) to 16,737.08 points.
Salesforce plunged 19.7% after reporting lower-than-expected profit and revenue guidance for the current quarter on Wednesday, citing weak customer spending on its cloud computing services.
IN ASIA
The Tokyo Stock Exchange rebounded from a one-month low on Friday, with US yields falling as investors hope the Fed will cut rates this year. The Nikkei index lost 1.17% to 38,646.11 points and the broader Topix lost 0.49% to 2,741.34 points.
Semiconductor groups are falling, with semiconductor production equipment supplier Tokyo Electron losing 2.72%.
Chinese indices are rising, with investors positioning themselves ahead of US inflation figures. The Hong Kong Hang Seng index nibbles 0.92%, the Shanghai SSE Composite takes 0.21%, the CSI 300 0.13%.
RATE
Yields remain stable ahead of Friday’s indicators.
The ten-year Treasury yield is unchanged at 4.5501%, while the two-year rate remains at 4.9289%.
CHANGES
The dollar rebounds after falling sharply on Thursday, with markets positioning for the PCE inflation release later in the day.
The dollar rose 0.12% against a basket of reference currencies, while the euro lost 0.14% to $1.0817, and the pound sterling 0.08% to $1.272.
In Asia, the yen is stable at 156.79 yen per dollar, the Australian dollar rises 0.06% to 0.6636 dollars.
OIL
Crude is falling, while figures from the Energy Information Administration showed that diesel stocks had increased last week, raising fears that demand could be weaker than expected this summer.
Brent declined 0.13% to $81.75 per barrel, with light American crude (West Texas Intermediate, WTI) losing 0.31% to $77.67.
(Written by Corentin Chappron, edited by Zhifan Liu)
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