GREEN IN SIGHT IN EUROPE, THE THESIS OF PASSENGER INFLATION IS REQUIRED
by Patrick Vignal
PARIS (Reuters) – Major European stock markets are expected to rise on Friday after the S & P-500 set Wall Street’s closing record the day before as investors appear to agree with rising inflation in the United States is due to temporary factors and will subside.
According to the first indications available, the Parisian CAC 40, the Dax in Frankfurt and the FTSE in London would all gain around 0.15% at the opening.
The “core CPI” price index in the United States, which measures the evolution of prices excluding food and energy, emerged Thursday above expectations, up 0.7% last month compared to April and 3.8% over one year.
Investors, who learned at the same time that jobless claims in the United States hit a low of nearly 15 months last week (), are not panic-stricken and believe that the Fed, whose monetary policy announcements will fall next Wednesday, will maintain an accommodating posture.
The US central bank should not mark the gradual withdrawal (“tapering”) of its asset purchases before August or September, according to a survey by Reuters among economists.
The “tapering” itself should not begin before 2022, thinks Valentin Bissat, economist and strategist of Mirabaud, who points out that 40% of the increase in prices in the United States over the month of May comes again from vehicle prices. second-hand and airline tickets.
“We are maintaining our scenario of a temporary rise in inflation,” he told Reuters.
In the euro area, the European Central Bank (ECB) on Thursday raised its growth and inflation forecasts while pledging to maintain massive support for credit and activity, the decrease of which would risk increasing financing costs and jeopardizing the recovery.
“There is a desynchronization of economic cycles”, underlines Valentin Bissat. “The American cycle is more advanced than the European cycle. Eventually, we expect the Federal Reserve to tighten its monetary policy and reduce its asset purchases upstream of the ECB.
A WALL STREET
The New York Stock Exchange finished higher on Thursday with a closing record for the S & P-500 amid declining fears of runaway prices leading to premature monetary tightening.
The Dow Jones index gained 0.06%, or 19.10 points, to 34,466.24 points, and the broader S&P-500 gained 19.63 points, or 0.47%, to 4,239.18 points , above its previous closing peak which was dated May 7th.
The Nasdaq Composite for its part advanced 108.58 points (0.78%) to 14,020.33 points.
The Tokyo Stock Exchange’s Nikkei index rose slightly as it approached the close and the MSCI index comprising stocks from Asia and the Pacific (excluding Japan) rose 0.2%.
RATES / CHANGES
The easing of inflation fears is reflected in the yield on US 10-year government bonds, which fell as much as 2.6 basis points in Asian trade to a low since early March at 1.4335%.
It has fallen nearly 13 basis points since the start of the week and is heading towards its sharpest weekly decline in a year.
The dollar follows the movement with a decline of 0.1% against a basket of benchmark currencies.
The two benchmark crude contracts fell slightly to $ 72.27 per barrel for Brent and $ 70.06 for US light crude (West Texas Intermediate, WTI).
(Edited by Blandine Hénault)