The European indices were out of steam following several rising sessions and fell by 0.65% in Paris, 0.78% in Milan, 0.90% in Frankfurt and 0.25% in London around 12:15 GMT. Earlier, Asia finished in the red.
Wall Street is expected to extend its decline from the previous day, with futures pointing to an open down 0.48% to 0.82%.
On Thursday, the stronger than expected rise in the producer price index (PPI) in the United States in January cast a chill by reinforcing the idea that the United States Federal Reserve (Fed) might do even more to combat the inflation, a battle she has been waging for nearly a year.
“The question of how restrictive the conditions are now, and how long they will have to remain so, remains open,” said Tiffany Wilding, economist at PIMCO.
“For now, the economic data is consistent with the possibility of some additional increases,” she continues.
Comments from St Louis Fed office boss James Bullard and Cleveland Fed Chair Loretta Mester on Thursday reignited fears of a 50 basis point hike in policy rates in the next March central bank meeting, following a more moderate increase in February.
Last month, investors were hoping that the Fed would pause its monetary tightening cycle and even start cutting rates at the end of the year.
The euro zone is also “far from declaring victory over inflation” and faces “a risk that inflation will prove to be more persistent than what is currently assessed by the financial markets”, affirmed Isabel Schnabel, member of the executive board of the European Central Bank (ECB) in an interview with the financial news agency Bloomberg published on Friday.
On the debt market, sovereign yields tightened, the US 10-year Treasury bond was worth 3.89%, its German equivalent (Bund) rose to 2.51% and the yield of the French 10-year bond at 2.96%.
Hermès continues to shine
The luxury group announced new record results with a 38% increase in net profit, but has not decided to distribute a special dividend despite its record cash position. The action dropped 0.43% to 1,733.50 euros around 12:00 GMT and the rest of the sector followed the negative trend.
Mercedes-Benz under a lucky star
The automaker has increased its net profit by 34% in 2022 to 14.8 billion euros, but remains cautious for 2023, forecasting stable revenues and a slightly lower operating profit. The action took 2.44% around 12:00 GMT.
Allianz disappoints
The German insurer (-2.71%) certainly generated historic operating profit last year, despite a turbulent context, but it simply intends to stabilize it this year and has not announced a new buyback program. shares, disappointing investors’ expectations.
On the side of currencies and oil
The dollar was supported by the prospect of tighter monetary tightening.
Around 12:00 GMT, the dollar strengthened once morest the euro and the yen, taking 0.45% to 1.0625 dollars for one euro and 0.82% once morest the yen, at 135.04 yen for a greenback.
The oil market remained weighed down by the jump in US weekly inventories and the return of the prospect of prolonged monetary tightening in the United States.
The barrel of American WTI lost 3.03% to 76.11 dollars and the barrel of Brent from the North Sea dropped 2.95% to 82.62 dollars.
The Dutch TTF futures contract, which is a benchmark in the European market, was trading for less than 50 euros per megawatt hour (MWh) for the first time since September 2021.