The chart of the German DAX stock index as described by the Frankfurt Stock Exchange
by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected to rise slightly on Friday despite closing in the red on Wall Street, but the trend should remain cautious due to an almost universal monetary tightening in the major central banks of the world as the economic outlook worsens.
According to the first indications available, the Dax in Frankfurt should get the opening of 0.11%, the FTSE 100 in London 0.24% and the EuroStoxx 50 index 0.09%.
This week’s near-simultaneous hike in interest rates by several central banks, including the US Federal Reserve, and several warnings of recession risks have raised uncertainty, pushing investors to turn to the dollar. and in the bond market of harmful stocks, as. analysts.
“The excessive quantitative easing of the last decade will lead to excessive tightening and the market has no way to properly measure the impact on prices,” said David Bahnsen, chief investment officer of wealth manager The Bahnsen Group.
The publication this Friday of the monthly PMI of manufacturing activity and services may, however, provide investors with new elements of the evolution of the economic situation.
The Reuters consensus expects a further decline in the euro zone’s composite PMI index, which includes the manufacturing sector of industry and the services sector, to 49.0 in September after 49.6 last month.
In Great Britain, the new Prime Minister Liz Truss should also announce this Friday a new “growth plan” that should provide more support to the budget of the economy.
ON WALL STREET
The New York Stock Exchange ended lower on Thursday, as technology and growth stocks suffered from the rate hike decided on Wednesday by the US Federal Reserve.
The Dow Jones Industrial Average fell 0.35%, or 107.1 points, to 30,076.68 points.
The broader S&P-500 fell 31.94 points, or 0.84%, to 3,757.99 points.
The Nasdaq Composite fell by 153.39 points (-1.37%) to 11,066.81 points.
On the Tokyo Stock Exchange, the Nikkei index fell 0.58% to 27,153.83 points and the broader Topix fell 0.24% to 1,916.12 points as the close approached.
In China, the Shanghai SSE Composite lost 0.04%, while the CSI 300 gained 0.3%.
Bond yields benefited from this week’s announcements of interest rate hikes in the US, UK, Sweden, Switzerland and Norway among others.
The German two-year yield hit a more than 11-year high on Thursday at 1.897% and the ten-year yield then rose to its highest since September 2013, at 1.963%.
In the United States, the yield on ten-year Treasuries gained up to 20 basis points to 3.71%, benefiting from rising rate expectations, the Fed announced that its rates could rise to 4.6% in 2023 .
In the foreign exchange market, traders continued to digest the announcement Thursday of an intervention in Japan to support the yen, a first since 1998.
The yen, which rose before this intervention to nearly 146 to the dollar, traded on Friday at 142.16, up 0.13% against the greenback.
The euro, down 0.13% to 0.9823 dollars, was punished by the energy crisis in Europe and the evolution of the war in Ukraine, the referendums on an attachment to Russia planned this Friday in the territories occupied by the Ukrainians.
The Chinese yuan, which fell to 7.0964 to the dollar, was near a two-year low.
The dollar, which is at a 20-year high, is strong (-0.03%) against a basket of reference currencies, thanks to its status as a safe-haven asset and the continued pace of increases in Fed rate.
The price of oil is affected by the strength of the dollar and the fear of demand.
Brent lost 0.27% to 90.22 dollars a barrel and US light crude (West Texas Intermediate, WTI) lost 0.28% to 83.26 dollars a barrel.
(Written by Claude Chendjou, edited by Jean-Stéphane Brosse)