FALL IN SIGHT IN EUROPE, THE FED LEADS THE ATMOSPHERE
by Marc Angrand
PARIS (Archyde.com) – Major European stock markets are expected to fall on Friday in the wake of Wall and Tokyo after statements from several US Federal Reserve officials confirming their willingness to raise interest rates as early as March to stem inflation.
Index futures suggest a decline of 0.56% for the Dax in Frankfurt, 0.45% for the FTSE 100 in London and 0.87% for the EuroStoxx 50. As for the CAC 40 in Paris, it could yield around 0.7% according to the first available indications.
While the hearing in Congress of Fed President Jerome Powell had instead benefited actions on Tuesday, its likely future vice-president, Lael Brainard, cast a chill by telling the Senate that the institution had planned “several increases rate in the course of the year “and that it could take action” as soon as our purchases are completed “, therefore potentially from the meeting in mid-March.
The president of the regional office of San Francisco, Mary Daly, then judged “reasonable” to raise the rates in March and her counterpart in Chicago, Charles Evans, considered that monetary policy was for the moment “against. foot “from an inflation point of view.
These statements eclipsed the sharper-than-expected deceleration in US producer prices.
“Everyone is very nervous at the moment, because everything is likely to be put under pressure by the offensive policies of the Fed,” said Kyle Rodda, analyst at IG. “We hope that the return to normal monetary policy will be slow and painless, but that is not guaranteed because the Fed takes inflation very seriously.”
Investors await this Friday the figures for retail sales in the United States in December, which may have suffered from the start of the “Omicron wave” of the COVID-19 epidemic. The session will also be animated by the first results publications in the US banking sector, with those from Wells Fargo and Citigroup.
A WALL STREET
The New York Stock Exchange ended lower Thursday on profit taking, especially on technology stocks after three consecutive sessions of increase, after statements by Fed officials.
The Dow Jones index lost 0.49%, or 176.7 points, to 36,113.62, the Standard & Poor’s 500 lost 67.32 points (-1.42%) to 4,659.03 and the Nasdaq Composite fell 381.58 points (-2.51%) to 14,806.81.
Among the eleven major sector indices of the S&P, that of technology posted the largest drop at the end of the session (-2.65%), ahead of that of non-essential consumption (-2.08%) and that of health ( -1.63%).
Futures contracts on the main indices for now suggest a slight upward opening.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index is closing down 1.28% after falling below 28,000 points for the first time since December 20, technologies having weighed on the trend in the wake of the US Nasdaq.
In China, the Shanghai SSE Composite yielded 0.85% and the CSI 300 0.67%, fears over the real estate sector resuming the upper hand: the sector index lost 3.53%, its fourth consecutive decline.
For its part, the Seoul Stock Exchange lost 1.3% after another hike in the central bank’s key rate, to 1.25%, its pre-pandemic level, in order to curb inflation.
In China, monthly foreign trade figures show a slowdown in both imports and exports, although they slightly exceeded expectations last month.
CHANGES / RATES
The statements of Fed officials are not enough to reverse the downtrend in the dollar, which depreciates 0.14% against other major currencies.
The greenback is heading towards its worst weekly performance in eight months, a consequence of the reduction in long positions, with upcoming rate hikes now seen as integrated by the market.
The euro at 1.1478 dollars is trading at its highest since November 11.
On the bond market, the yield of ten-year US Treasuries, at 1.7256%, in Asia only erases a small part of its decline on Thursday, a consequence of the general increase in risk aversion.
OIL
The oil market is down slightly, the evolution of the COVID-19 epidemic in China fueling fears for demand while on the US side, Washington on Thursday announced the sale of 18 million barrels of crude drawn from strategic reserves , in an attempt to lower prices at the pump.
Brent is virtually unchanged at $ 84.58 per barrel but US light crude (West Texas Intermediate, WTI) is down 0.11% to $ 82.03.
(Written by Marc Angrand, with Daniel Leussink in Tokyo)
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