by Diana Mandia

(Reuters) – European stock markets ended with weak variations on Monday in a calm session in the absence of Wall Street and in anticipation of the publication this week of the minutes of the last meeting of the United States Federal Reserve (Fed) and a key indicator of inflation in the United States.

In Paris, the CAC 40 ended down slightly, by 0.16%, at 7,335.61 points, while the British Footsie gained 0.12% and the German Dax dropped 0.03%.

The EuroStoxx 50 index lost 0.09%, and the FTSEurofirst 300 and the Stoxx 600 posted small increases of 0.09% and 0.07% respectively.

Calm prevailed in a quiet session on Monday, with stock and bond markets closed on Wall Street due to “Presidents’ Day” and awaiting the publication on Wednesday of the “minutes” of the last meeting of the American Federal Reserve (Fed) on the background of concerns about a prolonged rise in rates.

The minutes should add some color to the U.S. central bank’s deliberations after the release of recent indicators that showed the resilience of the labor market and retail sales in January.

Core PCE, the Fed’s preferred measure of inflation, and US consumer spending figures are also due Friday.

In Europe, the Governor of the Bank of Finland, Olli Rehn, told the German daily Börsen-Zeitung on Monday that the European Central Bank (ECB) should continue to raise interest rates beyond March and that the peak rates could be reached during the summer.

“With inflation so high, further rate hikes beyond March seem likely, logical and appropriate,” he said.

The week will be marked by the publication on Tuesday of the preliminary PMI indices for February, the final figures for inflation in the euro zone on Thursday and a new series of publications of corporate results.

Geopolitically, North Korea’s ballistic missile launches and Washington’s warnings against China’s military support for Russia are also not conducive to risk-taking, on a day when the President American Joe Biden made a surprise visit to the Ukrainian capital.

VALUES

The basic resources compartment, helped by the prospect of a recovery in demand in China, signed the best sector performance in Europe with a gain of 2.51%, while the new technologies index lost 0, 53%.

In business news, Faurecia took 2.2%, the automotive supplier Forvia, born from the takeover by the French group of its German competitor Hella, having announced on Monday that it anticipates an improvement in its results this year. The European auto index ended up 0.35%.

Valneva gained 0.7% on the announcement of a priority review in the United States of its candidate chikungunya vaccine.

On the downside, Austrian bank Raiffeisen plunged 7.2% as US authorities demanded information on its activities in Russia.

Telecom Italia lost 2.7% as Italian public bank CDP and Australian fund Macquarie still failed to submit a bid to compete with KKR’s proposal for the Italian telecoms operator’s fixed network.

AT WALL STREET

Stock and bond markets are closed Monday on Wall Street due to Presidents’ Day.

RATE

The ten-year German Bund yield was stable on Monday at 2.459%, while the two-year yield was at 2.896%.

CHANGES

The dollar is stable against a basket of benchmark currencies after hitting a six-week high last week.

The Japanese currency is trading at 134.09 yen per dollar, pending Friday’s hearing before the Japanese Parliament of Kazuo Ueda, tipped to become governor of the Bank of Japan (BoJ).

The euro, down 0.07%, is trading at $1.0687.

OIL

Brent rose 0.65% to $83.54 a barrel on Monday while US light crude (West Texas Intermediate, WTI) rose 0.42% to $76.66 a barrel, both buoyed by record Chinese import estimates in 2023 following the country’s post-pandemic reopening.

TO FOLLOW TUESDAY:

(Diana Mandiá, edited by Blandine Hénault)

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