by Laetitia Volga

PARIS (Reuters) – European stock markets ended in disarray on Monday as calm returned to the bond market awaiting several meetings this week that could provide indications of the tightening of monetary policy in the United States .

In Paris, the CAC 40 gained 0.34% to 7,373.21 points. The British Footsie, penalized by mining stocks, lost 0.26% and the German Dax gained 0.48%.

The EuroStoxx 50 index advanced 0.4%, the FTSEurofirst 300 dropped 0.09% and the Stoxx 600 0.03%.

At the time of the close in Europe, Wall Street was evolving in the green thanks to the easing in the government bond markets, the Dow Jones winning 0.3%, the Standard & Poor’s 500 0.59% and the Nasdaq Composite 0.95%.

The announcement on Sunday in China of a growth target set at 5% for this year, a figure deemed prudent by investors, seems to ease fears for global inflation.

The rebound in activity in the country after the end of the “zero COVID” policy raised fears of a surge in demand, especially for raw materials, and therefore prices.

“Moderate growth in China raises hopes of a weak impact on inflation, which supports the idea that we could be nearing the end of the cycle of Federal Reserve rate hikes,” said Peter Tuz, chairman of Chase. Investment Counsel.

The coming days will be marked by a series of indicators, which include the monthly US jobs report, as well as hearings from Fed Chairman Jerome Powell in the Senate (Tuesday) and the House of Representatives ( Wednesday).

These two major meetings could provide more information on the central bank’s intentions in terms of monetary policy. For now, markets are pricing in a quarter-point rate hike for the next three meetings, according to CME Group’s FedWatch tool.

VALUES IN EUROPE

The European basic resources compartment fell 2.63%, the biggest drop of the day, after the Chinese announcement of a growth target at the bottom of the range of market expectations. Rio Tinto lost 2.80% and Anglo American 3.65%.

In Paris, Arcelormittal (-1.46%) finished last in the CAC 40 while LVMH shares gained 1.21%, supported, according to market sources, by an increase in HSBC’s recommendation to “hold” at “buy”.

Telecom Italia ended with a gain of 3.24% after the board of directors of the Italian Caisse des dépôts approved the project of an offer to purchase the fixed network of the operator.

EXCHANGES/RATES

On the currency market, the dollar lost 0.21% against a basket of benchmark currencies, widening its losses of last week, and the euro rose to 1.0685 dollars.

Benchmark government bond yields in Europe ended flat after the highs reached last week. That of the ten-year German Bund closed at 2.727% after a peak since 2011 on Thursday at 2.77%. Variations are also very limited for US yields, at 3.9675% for ten-year securities.

OIL

Oil prices are back in the green after falling nearly 2% during the session with uncertainties about Chinese growth. Brent rose to 85.82 dollars a barrel and American light crude (West Texas Intermediate, WTI) gained 0.34% to 79.95 dollars.

(Written by Laetitia Volga, edited by Tangi Salaün)

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