European equity markets expected to decline, worried about monetary tightening The Eurostoxx 50 opens at 3,541.79 points (-0.72%), the CAC 40 at 6,157.84 points (-1.04%), the DAX 40 at 12,956,66 points (-0.55%), the FTSE 100 at 7,282.07 points (+0.07%), the SMI at 10,746.70 points (-0.07%), the DJIA at 30,961.07 points 82 points (-0.56%), the Nasdaq at 11,552.36 points (-1.43%), the S&P 500 at 3,901.35 points (-1.13%) and the Nikkei 225 at 27,602.11 points (-0.98%).

As for exchange rates, the change compared to the close in New York indicates that EUR/USD opened at 1.0001 (+0.02%), EUR/JPY at 143.24 (-0.17%) and USD/JPY at 143.23 (-0.19%).

The leisure vehicle manufacturer Trigano announced on Friday that it has entered into exclusive negotiations to acquire 70% of the capital and voting rights of the Italian company S.I.F.I., the leading distributor of accessories for leisure vehicles in Italy. On Thursday evening, the airport operator Groupe ADP announced that its traffic had increased by 9.7 million passengers in August compared to the same month in 2021, again driven by the strong rebound in tourism after the lifting of health restrictions. The airports managed by the group welcomed 29.8 million passengers last month, representing 83.3% of traffic in August 2019, before the coronavirus pandemic.
For its part, the Virbac veterinary laboratory confirmed most of its prospects for 2022 on Thursday, although it reduced its debt reduction target, after recording an increase in its results in the first half of the year. For its part, gas and electricity producer Engie announced on Thursday its intention to sell 2.2 million shares of GTT representing around 6% of its capital as part of a private placement with institutional investors, thus continuing its withdrawal from the manufacturer of membranes for the transport of liquefied natural gas.

European equity markets are expected to fall sharply at the opening on Friday, as investors consider the consequences of a likely interest rate hike by the US Federal Reserve (Fed) next week. At 7:40am, the CAC 40 futures contract lost 55.5 points, or 0.9%, according to data from the IG Markets broker. The DAX 40 contract gave up 125 points, or 1%, and the FTSE 100 contract gave up 46.3 points, or 0.6%. Investors will examine car registration figures in the European Union for the month of August on Friday, then the final consumer price statistics in the eurozone for the same period.
The New York Stock Exchange closed sharply on Thursday, while fears of new restrictive measures by the Federal Reserve (Fed) next week after good economic indicators helped to push bond yields down. The market saw a 0.3% increase in retail sales in August in the United States on Thursday, while economists expected stability compared to July. This indicator confirms the resilience of consumption, the main pillar of growth in the United States, in a context of concerns linked to the persistence of inflation and the rise in interest rates.

In Asia, all major equity markets were trading in the red on Friday morning. At the end of the session, the Nikkei index fell by 1%, the Shanghai Composite Index lost 1% and the Hang Seng lost 0.4%. The yield on 2-year US Treasury bonds began to rise again on Friday morning, accentuating the reversal of the yield curve. Around 7:20am, the 10-year US Treasury rate was stable at 3.455%. The 2-year stock gained around 2 basis points, at 3.893%.
The euro was stable against the dollar on Friday morning but lost ground against the yen, like the greenback. Bank of America expects volatility in the foreign exchange market to increase: “The surprise caused by the August consumer price index [in the United States] was probably not an exceptional shock and should maintain volatility in the foreign exchange market until the end of the month, as investors revise their forecasts for interest rate hikes.”
The idea that rates will stay “higher for longer” was echoed by several Federal Reserve officials recently and higher-than-expected inflation in the United States supports this scenario, the bank notes. According to Bank of America, the dollar may weaken gradually next year as the Fed will start to worry more about growth than inflation.

Oil futures rose on Friday morning, with a probable technical rebound after their pullback the previous day. Around 07:30, the October contract on the New York-listed WTI earned 25 cents to $85.35 per barrel, while the November contract on Brent rose 38 cents to 91.22 dollars per barrel. Markets seem to be increasingly doubting the probability of an immediate solution to the Iran nuclear deal, TD Securities believes, citing internal indicators. For its part, Fitch indicates that while the Fed is expected to announce a sharp rate hike next week, concerns about demand continue to weigh on oil prices.