European stock indices were moving in a scattered order on Friday, with investors showing caution ahead of the publication of inflation data in the United States and the eurozone, and before knowing the outcome of the first round of the French legislative elections. In Europe around 07:20 GMT, the Frankfurt Stock Exchange gained 0.30% and London 0.41%. The Paris Stock Exchange was finally anchored in the red (-0.39%) after opening slightly higher.
“Big moves are possible in both directions in the coming days. Depending on what happens with inflation or in the new French elections on Sunday.”comments Andreas Lipkow, independent analyst. “Many investors are likely to postpone their commitments until next week and avoid taking too much risk ahead of key deadlines.”he continued.
The first round “will allow us to get an idea of the possible outcomes”, commented Deutsche Bank analysts. Thursday evening, the situation seemed frozen in the polls, which gave the National Rally (extreme right) a clear favorite with 36% of voting intentions, ahead of the left-wing New Popular Front alliance which grabbed half a point at 29%, according to the daily Ifop-Fiducial barometer for LCI, Le Figaro and Sud Radio.
Under the banner “Together for the Republic”the Macronist camp is still behind at 21%, while the traditional right (Les Républicains) is relegated to 6.5%. In this context, “French assets continued to lose ground, with the Franco-German 10-year spread closing Thursday above the 80 basis point mark for the first time since 2012”stressed the analysts.
Around 07:15 GMT, France’s 10-year borrowing rate continued to increase slightly, to 3.27%, the German rate at the same maturity reached 2.43%. Gold, “Wider rate spread means less appetite for euro”explains Ipek Ozkardeskaya, analyst at Swissquote Bank. On the foreign exchange market, the single European currency fell slightly by 0.05% against the greenback, to 1.0698 dollars.
On the agenda for the session, investors will digest inflation indicators for the month of June for France, Italy, Spain and Portugal. But it is above all the American PCE price index for May, which must be published before the opening of the New York Stock Exchange, which is the most anticipated. The inflation indicator most followed by the American central bank (Fed), it is expected to be stable over one month, after having increased by 0.3% in April.
In Asia, on the Chinese stock exchanges, Hong Kong gained 0.20% in the latest trading, Shenzhen gained 0.73%, while Shanghai was stable (-0.01%). In Japan, the Tokyo Stock Exchange gained 0.61%, driven by the fall of the yen which reached a new low against the dollar since 1986, a favorable trend for Japanese export stocks and which also makes the local stock market attractive for foreign investors.
Around 07:15 GMT, the yen lost 0.14% against the dollar, to 161.00 yen. SoftBank Group (+2.52%) would be ready to invest between 10 and 20 million dollars in Perplexity AI, an American start-up in generative artificial intelligence, according to information from the Bloomberg agency. If the amount of this investment is symbolic, it would nevertheless value Perplexity to the tune of $3 billion and illustrates the desire of SoftBank Group CEO Masayoshi Son to invest more and more in the AI sector, full of opportunities but also risks.
Read alsoTokyo Stock Exchange Ends Higher, Yen Hits New Low Since 1986
SoftBank Group also raised the equivalent of 1.8 million euros on Friday via a bond issue in euros and dollars, its first such transaction in foreign currencies since 2021. Oil prices are trending upwards around 07:10 GMT: the price of a barrel of North Sea Brent, for delivery in August, gained 0.65% to $86.95. Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery the same month, rose 0.77% to $82.37. Bitcoin gained 0.19% to $61,535.
