Friday, May 26, 2023

A wait-and-see attitude prevails ahead of a key inflation indicator in the United States

PARIS (Reuters) – Wall Street is expected to see little change on Friday and European stock markets edged cautiously into a green mid-session after the publication of inflation data in the euro area and consumption by U.S. households and PCE prices. index, a figure closely watched by the US Federal Reserve (Fed). Futures on the New York indexes are giving Wall Street a 0.27% open for the Dow Jones, 0.16% for the Standard & End, marking the start of the last session of a quarter before a banking crisis emerged in early March. Poor guy stagnates in the 500 and Nasdaq. In Paris, the CAC 40, which is up 12.31% on the quarter at this stage, was up 0.53% at 7,301.7 as of 11:05 GMT. The DAX in Frankfurt advanced 0.38% and the FTSE in London advanced 0.25%.

The pan-European FTSEurofirst 300 index rose 0.47% and the euro zone’s EuroStoxx 50 rose 0.38%. The Stoxx 600, which is headed for a quarterly gain of 7.47%, is up 0.4%.

Investors will focus on February US household income and spending data at 12:30 GMT, which includes the PCE price index. In its “core” version, that is, excluding energy and food products, this inflation indicator supported by the Fed was shown by the Reuters consensus as a decline of 0.4% in one month (compared to +0.6% in January) and an increase of 4.7%. Has been given. Over a year as of Jan.

In the eurozone, headline inflation registered its most marked deceleration in March, up to +8.5% after a year at +7.1%, but excluding volatile elements, prices edged up, according to Eurostat’s first estimate. Inflation in France slowed to 6.6% a year in March, in line with European standards, but food prices accelerated, according to data published Thursday in Germany and Spain.

In terms of the economy, the unemployment rate in the euro area remained stable in February at 6.6% of the working population, while Great Britain narrowly escaped recession in the fourth quarter with a 0.1% increase. Retail sales in Germany fell against all expectations in February, 1.3% in a month, and in France household consumption fell 0.8% in February. In the United States, consumer spending, which represents more than two-thirds of economic activity, was expected to rise 0.3% in February after a 1.8% jump in January.

These mixed data puzzled analysts as stock market indexes rose sharply throughout the quarter, especially in the technology compartment, which is up more than 19% since the start of the year on both the S&P-500 and Stoxx. , Expected reduction in the cost of credit.

HSBC’s Willem Sells said, “What lies ahead is intriguing. Our forecasts for economic growth and interest rates differ widely.”

Two Fed officials, John Williams and Lisa Cook, are scheduled to speak on Friday, while Christine Lagarde, President of the European Central Bank (ECB), is expected to speak at 3:00 pm GMT on the sidelines of an event in Florence. ,

price in europe

In the main compartments of the European quote, stocks related to consumption (+1.6%) are particularly sought after. Carrefour takes 2.24% on the CAC 40, while H&M still gains 2.21% after a 16% jump linked to its results, with several intermediaries raising their advises and price targets on the Swedish giant.

Announcements by the White House in favor of a return to regulation of small and medium-sized banks pushed the banking index down 0.38%.

In other sectors, ABB rose 1.46% in reaction to the announcement of a new share buyback plan, while German Sartorius fell 5.06% after announcing a €2.4 billion buyout from French Polyplus, a gene therapy specialist. follow wall street prices


The dollar is up 0.31% against a basket of benchmark currencies but is down 1.2% for the full quarter at this level.

The euro fell 0.31% to $1.0867 but rose more than 1% during the week, on course for its best weekly performance since mid-January.


Long-term bond yields in Europe are broadly stable, but short-term bond yields, the most sensitive to changes in interest rates, tend to rise following inflation data. The yield on the two-year German Bund rose nearly 4.5 basis points to 2.747%, its biggest weekly increase since 1990, after gaining 41 points this week.

In the United States, the same phenomenon has been observed, with the two-year Treasury yield gaining more than six basis points at 4.1472%, while the ten-year is practically unchanged at 3.5469%.


Oil markets edged higher on Friday ahead of the PCE price index in the United States, which could hint at the trajectory of rates.

Brent rose 0.42% to $79.60 a barrel and US light crude (West Texas Intermediate, WTI) rose 0.71% to $74.90.

The two oil benchmarks, which gained nearly 5% and nearly 7% respectively this week, are headed for their biggest monthly declines since November, having declined 6% and 4% so far.

(Editing by Claude Chandjou, Editing by Kate Enstringer)

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