Market: Hesitation on equities, the ECB urges caution in Europe
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PARIS (Reuters) – European stock markets ended in disarray on Tuesday after a flat session, as risk appetite was tempered by next week’s monetary policy meeting of the European Central Bank (ECB). whose markets are anticipating a further sharp rise in rates.

In Paris, the CAC 40 gained 0.26% to 7,050.48 points. The British Footsie lost 0.35% and the German Dax lost 0.07%.

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The EuroStoxx 50 index gained 0.05%, the FTSEurofirst 300 lost 0.2% and the Stoxx 600 0.24%.

Early results from IHS Markit’s monthly PMI surveys suggest that the eurozone economy could avoid a deep recession this winter, which analysts say could provide comfort to the ECB to stay on course with its monetary tightening, without overdoing it. fear of harming growth.

According to economists polled by Reuters, the ECB will hike rates by 50 basis points at the next two meetings.

The Fed, which also meets next week, should ease off on the pace of its monetary tightening, according to market expectations, with a rate hike of 25 basis points on February 1.

But that prospect is no longer succeeding in satisfying the US market as the quarterly releases of major corporations gain in intensity.

At the time of the close in Europe, the main New York indices were down around 0.1%, the industry flagships 3M (-5.10%), Johnson & Johnson (-1.24%) and General Electric (-0.26%) having warned that the coming year would be economically difficult.

VALUES

In Europe, Dassault Aviation fell 4.22%, penalized by the lowering of the board of Exane BNP Paribas to “neutral”. Swatch Group gained 5.06% as the watch group said it was optimistic about the recovery of the Chinese market after its overall sales rose 2.5% in 2022.

British conglomerate AB Foods, which owns Primark, lost 2.01% after warning that adverse economic factors could impact consumer spending in 2023.

RATE

In bond markets, US Treasury yields are falling on the prospect of a moderation in monetary tightening from the Fed: the ten-year by five basis points to 3.4821%.

The European market followed suit, with the ten-year German Bund yield falling four points to 2.159%.

FOREIGN EXCHANGES The dollar fell slightly against a basket of benchmark currencies and the euro was stable at 1.0869 dollars.

The pound is trading at its lowest level in a week against the euro, as the PMI index on UK private sector activity fell to its lowest level since January 2021.

OIL

With doubts about the economic outlook, the oil market sees red: the barrel of Brent fell by 1.92% to 86.5 dollars and that of American light crude (West Texas Intermediate, WTI) by 1.78% to 80 .17 dollars.

(Laetitia Volga, edited by Tangi Salaün)

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