Europe's main stock markets are expected to open lower on Friday, in the wake of Wall Street's close, as the dollar's rise, heightened inflationary pressures and the restrictive comments of certain members of the US Federal Reserve (Fed) are likely to fuel risk aversion.

Index futures suggest a 0.70% decline for the Paris CAC 40, which set a session record at 7,387.29 points on Thursday.

Frankfurt's Dax could fall by 0.75%. London's FTSE 100, which rose the previous day to an all-time high of 8,047.06 points, is expected to fall by 0.27%. The EuroStoxx 50, meanwhile, is expected to fall by 0.84%.

As in previous sessions, a number of financial publications from European companies are expected to drive trading, including those from EDF, Hermès, Safran, Air France-KLM, Allianz and Mercedez-Benz.

As for statistics, US producer price data on Thursday showed an increase in January at the fastest pace in seven months, while jobless claims in the country unexpectedly fell last week, a further sign of a buoyant labor market as the Fed works to curb demand to curb inflation.

"The latest data confirms the Fed's view that we need to keep raising rates, and keep them higher, for longer," says Tapas Strickland, economist at National Australia Bank.

Two Fed officials, Loretta Mester and James Bullard, also said on Thursday that the US central bank probably should have raised rates more than it did earlier this month, and stressed that further increases in the cost of credit were essential to bring inflation back to the desired level.

In Europe, where macroeconomic worries have been relegated to the background in recent sessions thanks to solid corporate results, they could make a comeback this Friday with the publication of producer prices in Germany (07:00 GMT), consumer prices in France (07:45 GMT) and retail sales in Great Britain (07:00 GMT).

ON WALL STREET

The New York Stock Exchange ended sharply lower on Thursday after economic indicators fueled fears that the Fed would continue to raise interest rates.

The Dow Jones index gave up 1.26% to 33,696.39 points.

The broader S&P-500 lost 1.38% to 4,090.51 points.

The Nasdaq Composite was down 1.78% at 11,855.83 points.

All the major sectors of the S&P-500 ended in the red, including Tesla, which fell by 5.7% following the announcement of a recall of 362,000 vehicles in the US due to a problem with its autonomous driving software.

ASIA

On the Tokyo Stock Exchange, the Nikkei index ended down 0.66% at 27,513.13 points, while the broader Topix gave up 0.46% at 1,991.93 points.

In China, the Shanghai SSE Composite gave up 0.35% and the CSI 300 lost 0.94%.

The MSCI index of Asian and Pacific stocks (excluding Japan) was down 0.68%, heading for a third consecutive week in the red.

RATES/CHANGES

Yields on 10-year and 2-year US Treasuries rose on Friday to 3.87% and 4.65% respectively.

The dollar advanced by 0.12% on Friday against a basket of reference currencies, to a new six-week high, while the euro fell by 0.34% to $1.0632, to its lowest level since January 9.

OIL

Oil prices are heading for a weekly decline of over 2% on demand concerns linked to the prospect of a prolonged Fed interest rate hike.

Brent crude lost 0.97% to $84.31 a barrel on Friday, while West Texas Intermediate (WTI) crude shed 1.07% to $77.65.

(Written by Claude Chendjou, edited by Matthieu Protard)

by Claude Chendjou