by Laetitia Volga

PARIS (Reuters) – Wall Street is expected in scattered order on Thursday and European stock markets are reducing their losses mid-session as the rise in bond yields is less lively after the unsurprising announcement of still very strong inflation in the currency block.

Futures contracts on New York indices signal an increase of 0.27% for the Dow Jones but a decline of 0.27% for the Standard & Poor’s-500 and 0.42% for the Nasdaq.

In Paris, the CAC 40 is unchanged at 7,235.10 around 12:10 GMT. In Frankfurt, the Dax fell by 0.36% and in London, the FTSE by 0.16%.

The pan-European FTSEurofirst 300 index dropped 0.02%, the eurozone’s EuroStoxx 50 lost 0.08% and the Stoxx 600 edged down 0.08%. The latter lost in session up to 0.67% and reached its lowest in one month.

Although headline inflation in the euro zone continues to show signs of easing, the underlying tensions, on the contrary, are growing. The first estimate of inflation in February shows that excluding energy and unprocessed food, price inflation fell from 7.1% to 7.4%, which complicates the task of the Central Bank European Union in its fight against inflation.

“Inflation was clearly worse than expected but perhaps not as bad as feared, given that expectations have changed following the release of national figures in recent days,” said Ben Laidler, at Etoro.

While a rate hike of half a point in 15 days is almost done, what the central bank could decide afterwards is more uncertain. It will depend on the data, said Thursday the president of the institution Christine Lagarde.

“With core and food inflation still high and no signs of a weaker labor market, the ECB is unlikely to end its rate hike cycle in the near future,” commented economist Peter Sidorov. senior at Deutsche Bank.

The same concerns dominate on Wall Street. Fueling fears over the Fed’s still-aggressive monetary policy, Minneapolis Regional Office Chairman Neel Kashkari said on Wednesday he was open to the idea of ​​a 50 basis point rate hike this month- this.

This idea is increasingly heard among observers but for now the majority of investors are still anticipating a quarter point hike.

VALUES IN EUROPE

On the stock market, the chipmaker STMicroelectronics lost 5.35%, the biggest drop in the CAC 40, and its rival Infineon 1.81%. This underperformance is explained, according to analysts, by an announcement from Tesla, which said it had found a way to use significantly less silicon carbide thanks to internal technology.

After opening in the green, Veolia fell by 0.43% despite record results in 2022.

Vallourec climbed 3.21% and Technip Energies 7.71% after their results while Covestro (-5.38%) and AB InBev (-1.06%) are in the red after theirs.

RATE

The yield on ten-year US Treasury bonds continues to rise, but at a slower pace than at the start of the session. It takes another two basis points to 4.0142%, after a three-month high of 4.04%.

In the eurozone, the bond market is showing a similar trend: the ten-year German Bund yield peaked since 2011 at 2.77% before stabilizing around 2.706%.

The five-year-ahead inflation rate, the main barometer of investors’ long-term inflation expectations, rose to 2.5291%, the highest since Refinitiv tracked the data in 2013.

CHANGES

With the rise in US bond yields, the “dollar index”, which measures the variations of the greenback against a basket of currencies, gained 0.27%.

The euro retreats around 1.0619 dollar.

OIL

The oil market is rising, driven by signs of a strong economic recovery in China, the leading crude importer.

Brent gained 0.55% to 84.77 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.59% to 78.15 dollars.

(Laetitia Volga, edited by)

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