(Reuters) – European stocks ended slightly higher on Monday in a quiet session as inflation data releases this week should provide further indications of central bank plans for rates.

On May 8, when several markets were open, the CAC 40 ended up 0.11% at 7,440.91 points. The German Dax, on the other hand, erased its initial gains to end down 0.05%, impacted by the stronger than expected drop in German industrial production.

The EuroStoxx 50 index gained 0.19%, the FTSEurofirst 300 and the Stoxx 600 0.35%.

The London Stock Exchange, closed as a public holiday was declared in honor of the coronation of Charles III, will reopen on Tuesday.

Attention now turns to the publication on Wednesday of consumer price figures in the United States which will be particularly watched, after the monthly employment report on Friday showed stronger than expected resilience of the labor market. work, removing the specter of a recession but reviving the prospect of continued monetary tightening led by the US Federal Reserve (Fed).

The Reuters consensus forecasts an acceleration of US inflation to 0.4% over one month.

Ahead of that, the market will take notice of the Fed’s quarterly bank lending survey, which should provide some insight into the impact of rising interest rates as the banking sector remains under pressure in the United States after the failure of regional banks.

In Europe, prices are expected to slow sharply this year, said Monday the chief economist of the European Central Bank (ECB), Philip Lane, while noting that for the moment their growth was still very dynamic, including for food and core inflation.

Final inflation figures for Germany, Europe’s largest economy, are due on Wednesday.

VALUES

The Basic Resources (+0.5%) and Energy (+0.6%) sectors rose as fears of a recession receded after the release of the US jobs report on Friday.

In Paris, Vallourec, which obtained authorization in Brazil for the resumption of operation of its Pau Branco iron mine, jumped 4.5%, the largest increase in the SBF 120 index.

Alstom, which announced Friday the appointment of Bernard Delpit as financial director from June 30, took for its part 3.3%.

In Italy, Monte Dei Paschi Di Siena (MPS) gained 5.8% as the Treasury was ready to reduce its stake in the bank, sources said.

In Amsterdam, postal operator PostNL climbed 10.2% after reporting an unexpected operating profit in the first quarter.

AT WALL STREET

After opening without direction, the Dow Jones lost 0.18%, the Standard & Poor’s 500 rose 0.03% and the Nasdaq Composite fell 0.05% at the European close.

THE INDICATORS OF THE DAY

Investor sentiment in the euro zone has deteriorated against all expectations since the beginning of May (-13.1 points) in a context of persistent inflation and worries about the energy file, according to the monthly survey of the Sentix Institute published during the day.

In Germany, industrial production fell more than expected in March, partly due to the weak performance of the automotive sector, according to the Federal Statistical Office, which has revived fears of recession in Europe’s largest economy. Europe.

“The German manufacturing industry is increasingly suffering from global rate hikes, which are increasingly dragging down the economy,” said Ralph Solveen, chief economist at Commerzbank, noting that the risks of recession in Germany were increasing.

CHANGES

At the time of the European close, the dollar, which suffered a second consecutive weekly loss last week with a fall of 0.4%, is stable against a basket of reference currencies, pending the publication of the Fed’s bank lending survey.

The euro fell 0.01% and traded at 1.1017 dollars.

RATE

Eurozone bond yields rose slightly on the prospect that ECB officials would renew their commitment to raise interest rates.

“The heavy schedule of ECB speakers this week…is likely to confirm last week’s determined message on rates,” said Commerzbank rates strategist Rainer Guntermann.

The yield on the two-year German Bund, the most sensitive to monetary policy expectations, took 4 basis points to 2.6%, while its 10-year equivalent gained 2 basis points to 2.3% .

In the United States, the yield on 10-year Treasuries rose by more than 4 basis points to 3.4%.

OIL

Oil prices rose sharply as fears of a recession receded, with some traders also saying the recent drop in prices appeared excessive, with three consecutive weekly declines for the first time since November.

Brent gained 2.15% to 76.92 dollars a barrel and US light crude (West Texas Intermediate, WTI) 2.5% to 73.12 dollars.

“An oversold situation in the market, combined with the fact that Brent managed to find support ahead of the March low, forced recently established short sellers to look for cover, which could underscore that the recent selloff was excessive,” said Ole Hansen, head of commodities strategy at Saxo Bank.

(Written by Diana Mandiá, edited by Jean Terzian)

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