by Diana Mandia

(Reuters) – European stock markets ended higher on Tuesday, supported by the publication of indicators deemed reassuring and the rise in mining stocks, awaiting new statistics this week which could confirm the prospect of a long-awaited pause in the markets. rate hikes.

In Paris, the CAC 40 ended up 0.89% at 7,390.28 points. The British Footsie ended with a gain of 0.57% and the German Dax of 0.37%.

The flagship index of the Paris Stock Exchange hit a historic record in session on Tuesday at 7,403.67 points.

The EuroStoxx 50 index gained 0.55%, the FTSEurofirst 300 0.57% and the Stoxx 600 0.62%.

Tuesday’s release of a series of well-received economic indicators boosted risk appetite as the Easter long weekend returns, as well as hopes for a pause or at least a moderation in rate hikes. interest from central banks.

In Europe, the market is pricing an 80% chance of a 25 basis point rate hike at the European Central Bank (ECB) meeting in May and just 20% the possibility of a 50 basis point hike. basic.

In the United States, most operators are also betting on a 25-point rate hike by the United States Federal Reserve (Fed) next month, and the hope of an end to the tightening cycle later in 2023 relieves investors. , even if the pace of job creations in March remained strong in the US market.

Several indicators expected this week, including data on consumer and producer prices in the United States and inflation in Germany, should confirm or invalidate this hope.

“Everyone is trying to figure out if the disinflation process is picking up and if that’s making it harder for the Fed to act,” said Edward Moya, senior market analyst at OANDA.

Meanwhile, the Sentix institute survey published on Tuesday showed that investor confidence in the euro zone has improved since the beginning of April, with an index of -8.7 against -11.1. in March.

In the indicator program, retail sales in the euro zone fell in February by 0.8% over one month, as expected by the Reuters consensus, and by 3.0% over one year, a sign that monetary tightening for curbing demand is paying off.

The International Monetary Fund (IMF) further raised its global core inflation forecast for 2023 to 5.1% from 4.5% forecast in January, arguing that the rise in prices has yet to hit a low. peak in many countries despite falling energy and food prices.

VALUES

Among the major compartments of the European quotation, basic resources (+3.63%), driven in particular by ArcelorMittal (+4.39%), the depreciation of the dollar having contributed to the increase in the prices of base metals and precious metals, and automotive (+1.83%), posted the two strongest gains on the Stoxx 600.

In corporate news, Accor ended up 1.1% on Morgan Stanley’s upgraded recommendation to “overweight”, while Soitec, a top performer in the SBF 120, jumped 5, 2% after an update of its forecasts for 2024.

In Zurich, UBS took 1.07% after the raising of its price target by JP Morgan, the day of a debate in the Swiss Parliament on the conditions of the rescue of Credit Suisse (+0.92%) by its great rival .

Glencore advanced 3.2% while its managing director is due to meet personally Thursday in Toronto with shareholders of the Canadian group Teck Resources that the Anglo-Swiss giant wants to buy.

On the downside, the Scandinavian airline SAS plunged 9.5% in fear of an exit from the stock market after its placement under the protection of bankruptcy law in the United States.

AT WALL STREET

At the time of the close in Europe, the Dow Jones gained 0.09%, and the Standard & Poor’s 500 0.04%, while the Nasdaq lost 0.31%, in a context of caution with regard to risk and , therefore, of the technology sector, before the publication of the inflation figures.

CHANGES

In the foreign exchange market, the “dollar index”, which measures the movements of the greenback against a basket of currencies, moved into positive territory after falling earlier in the day awaiting inflation data. American scheduled for Wednesday.

The euro rose 0.46% to 1.0914 dollars.

RATE

In the euro zone, bond yields for the euro zone rose sharply on Tuesday: those of the ten-year German Bund gained more than 11 basis points to 2.299%, while its two-year equivalent gained more than 15 points. at 4.053%, catching up with the rise recorded on Friday and Monday by American rates following the publication of employment figures in the United States and after two sessions of market pause in Europe due to the weekend of Easter.

The yield on ten-year US Treasury bills rose 3 basis points to 3.4431% and its two-year equivalent rose 5 basis points to 4.0579.

OIL

Oil prices rose on Tuesday, buoyed by a weaker dollar, which is making crude cheaper for buyers holding other currencies, and hopes that the Fed may ease monetary tightening soon, although concerns remain over the Chinese demand.

Brent rose 1.45% to 85.4 dollars a barrel and US light crude (West Texas Intermediate, WTI) 2.07% to 81.39 dollars.

(Written by Diana Mandiá, edited by Jean-Stéphane Brosse)

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