Europe's main stock markets are expected to open slightly higher on Friday, still buoyed by hopes of a lull in central bank monetary tightening, but the quarterly financial statements of Wall Street's major banks should prompt a degree of caution.

Index futures suggest a 0.21% rise for the Paris CAC 40, which hit an all-time high on Thursday for the third consecutive session. A rise of 0.29% is expected for the Dax in Frankfurt and 0.17% for the FTSE 100 in London. The EuroStoxx 50 could gain 0.21%.

Following in the footsteps of the Bank of Canada (BoC), the Australian central bank and the Bank of South Korea, the Monetary Authority of Singapore (MAS) in turn decided on Friday to observe a pause in raising interest rates for the first time since April 2021.

In recent sessions, the publication of several indicators showing a slowdown in inflation in the United States has fuelled hopes of an imminent end to the Fed's monetary tightening.

Futures contracts give a 68% probability of a Fed rate hike of 25 basis points in May, and virtually zero probability of further increases in credit costs beyond that date. According to the FedWatch barometer, a rate cut of 50 basis points is even expected at the end of the year.

However, the start of the corporate earnings season in the US, with reports from JPMorgan, Citigroup, Wells Fargo and BlackRock, could temper risk appetite.

Analysts expect S&P-500 companies to report quarterly earnings down 5.2% year-on-year, compared with the 1.4% growth previously expected at the start of the year, according to data from Refinitiv.

In Europe, after LVMH's better-than-expected first-quarter sales, Hermès, which also reported better-than-expected quarterly sales, is awaited by investors.

On the macroeconomic front, the market will learn at 06:45 GMT of final consumer prices in France, while in the US, monthly retail sales and industrial production data are due in the afternoon.

ON WALL STREET

The New York Stock Exchange finished sharply higher on Thursday on hopes that the Fed will halt its rate hike.

The Dow Jones index gained 1.14%, or 383.19 points, to 34,029.69.

The broader S&P-500 gained 54.27 points, or 1.33%, to 4,146.22.

The Nasdaq Composite advanced by 236.94 points (1.99%) to 12,166.27.

Delta Air Lines ended the day down on its first-quarter profit, which fell short of analysts' expectations, while Harley-Davidson was penalized by the departure of its CFO, Gina Goetter, at the end of April.

ASIA

On the Tokyo Stock Exchange, the Nikkei index advanced 1.2% to 28,493.47 points, while the broader Topix gained 0.54% to 2,018.72 points at the close. The Japanese market was driven in particular by good results from Fast Retailing, the owner of Uniqlo, which jumped 8.49%.

In China, the Shanghai SSE Composite gained 0.53% and the CSI 300 gained 0.51%.

The MSCI index of Asian and Pacific stocks (excluding Japan) gained 0.6%.

CURRENCIES/TAXES

The dollar, which has fallen to a one-year low against a basket of reference currencies, retreated by 0.17%, penalized in particular by the contraction in US producer prices.

The euro stood at $1.1068 (+0.22%) after hitting a new one-year high of $1.1075.

Money markets are expecting further rate hikes by the European Central Bank (ECB) of at least 50 basis points, against a pause in the US.

The yield on ten-year US Treasuries is virtually unchanged at 3.4355%, while the German Bund with the same maturity is trading at 2.372%. The spread between these two bonds has narrowed to around 100 basis points, its lowest level in two years.

OIL

Oil prices rose on signs of lower Russian production and tighter supply, ahead of the monthly report from the International Energy Agency (IEA) later today, which will clarify the outlook for global demand.

Brent crude gained 0.26% to $86.31 a barrel, while US light crude (West Texas Intermediate, WTI) gained 0.35% to $82.45.

(Written by Claude Chendjou, edited by Matthieu Protard)

by Claude Chendjou