by Claude Chendjou

PARIS (Reuters) – European stock markets ended higher on Thursday and Wall Street was also on the green at the end of the morning in New York, investors being reassured by the slowdown in inflation in the United States and the solid results or forecasts from companies like LVMH.

In Paris, the CAC 40 ended with a gain of 1.13% to 7,480.83 points after hitting a new record at 7,485.59 points. The British Footsie advanced 0.24% and the German Dax 0.16%.

The EuroStoxx 50 index rose 0.67%, the FTSEurofirst 300 0.43% and the Stoxx 600 0.40%.

After the consumer price statistics (CPI) in the United States showed a sharper than expected slowdown in March, US producer prices (PPI) for their part posted a contraction of 0.5% last month compared to compared to February.

In terms of the economy, jobless claims in the United States increased more than expected last week, to 239,000.

The new data is fueling hopes of an imminent pause in the US Federal Reserve (Fed) monetary tightening cycle, with markets now pricing in a final 25 basis point hike in central bank rates in May.

In the eurozone, where the European Central Bank’s (ECB) rate hike cycle started later, several officials from the European institution, such as Joachim Nagel and Bostjan Vasle, pleaded on Thursday for further increases in the cost of borrowing particularly in view of the persistence of underlying inflation, but sources told Reuters that the ECB could opt for a limited hike in its rates of 25 basis points in May.

VALUES IN EUROPE

In Europe, the positive trend was driven by LVMH, which jumped 5.65% after hitting an all-time high of 884.5 points. The world leader in luxury achieved a better than expected first quarter thanks in particular to China, pulling in its wake Kering (+2.62%), Hermès (+3.07%), Moncler (+4.45%) or even Burberry (+2.52%).

The cyclical consumer sector finished at the top of the Stoxx 600 (+3.79%), while distribution (+0.9%) was also sought after, with in particular the supermarket chain Tesco which took 0.59 % thanks to its annual forecasts.

AT WALL STREET

At the time of the close in Europe, the Dow Jones advanced by 0.52%, the Standard & Poor’s 500 by 0.73% and the Nasdaq by 1.46%, the indices being supported by new macroeconomic data in the United States .

Growth stocks like Apple, Amazon and Alphabet climbed 1.85% to 3.01% as short-term bond yields fell.

Delta Air Lines fell 1.20% despite a higher-than-expected current-quarter profit forecast as investors focused on the first quarter, which was hurt by rising jet fuel costs.

Harley-Davidson fell 3.69% with the announcement of the departure of its financial director Gina Goetter in favor of the toy manufacturer Hasbro (+1.52%).

THE INDICATORS OF THE DAY

Industrial production in the euro zone rose more than expected in February, by 1.5% month on month, according to Eurostat.

CHANGES

The dollar is at a two-month low (-0.59%) against a basket of benchmark currencies and one year against the euro, which stands at 1.1051 dollar (+0.56%) . The greenback is affected by the slowdown in inflation in the United States.

The pound sterling is trading at 1.2531 dollar (+0.37%), despite the stagnation of the British economy in February.

RATE

The yield spread between US and German ten-year government bonds narrowed on Thursday to its lowest level in two years as expectations of rate hikes on both sides of the Atlantic shifted, a rise 75 basis points are still expected in the euro zone against only 25 points in the United States.

The yield on ten-year Treasuries stands at 3.4224% and that of the German Bund with the same maturity at 2.373%.

OIL

Oil prices fall as OPEC notes on Thursday an increase in risks likely to weigh on demand this summer: Brent falls 0.82% to 86.61 dollars a barrel and American light crude (West Texas Intermediate, WTI) 0.74% to $82.64.

(Written by Claude Chendjou, edited by Matthieu Protard)

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