by Laetitia Volga
PARIS (Reuters) – European stock markets ended higher on Thursday, buoyed by hopes of an upcoming agreement on the debt ceiling of the United States.
In Paris, the CAC 40 gained 0.64% to 7,446.89 points. The British Footsie advanced 0.25% and the German Dax 1.33%, the highest since January 5, 2022.
The EuroStoxx 50 index ended up 1.02%, the FTSEurofirst 300 0.48% and the Stoxx 600 0.39%.
On Wall Street, the Dow Jones fell slightly (-0.1%), torn between the decline in demand recorded by Cisco and the upward revision of Walmart’s annual outlook. The S&P-500 and Nasdaq gained 0.46% and 1% respectively.
US President Joe Biden and Republican House of Representatives boss Kevin McCarthy stressed this week that a deal to raise the government’s borrowing limit is within reach.
The federal administration could find itself short of money to pay salaries, pensions and creditors as of June 1, estimated the Treasury.
“The probability of a default is low, but as we get closer to date X, which itself is a moving target, we are likely to see more volatility,” said Jake Jolly, at BNY Mellon. InvestmentManagement.
Joe Biden and Kevin McCarthy have agreed to meet on Sunday on this file.
On the stock market, Trigano climbed 13.32%, its strongest rise since March 2020, after the announcement of its first-half results, which show continued strong demand for motorhomes.
In London, Burberry fell 5.20% as the luxury group’s weak performance in the US market overshadowed stronger-than-expected quarterly revenue, thanks to a rebound in China.
British telecom operator BT lost 5% after announcing annual cash flow below expectations and plans to cut up to 55,000 jobs by 2030.
THE INDICATORS OF THE DAY
In the United States, jobless claims fell more than expected last week, indicating that the labor market remains tight and that the Fed’s efforts to rein in the economy have not fully succeeded.
On the other hand, the index of economic activity in the Philadelphia area rose to -10.4 while the markets expected a contraction to -19.8.
In the currency market, the recent upward movement in the dollar continues, thanks to optimism about US debt and speculation about the Federal Reserve’s monetary policy.
For some traders, today’s US data reinforces the likelihood of a soft landing for the economy and also dims the prospect of a Fed rate cut by the end of the year.
The greenback took 0.62% against a basket of international currencies, at its highest in three weeks. The euro fell back to 1.0777 dollars.
The Turkish lira, at 19.7975 to the dollar, is approaching its highest level hit in March at 19.80. Arriving in the first round of the presidential election on Sunday, outgoing President Recep Tayyip Erdogan is almost guaranteed to be re-elected in ten days against the opposition candidate, many analysts believe.
Eurozone benchmark bond yields ended sharply higher, a logical move in the face of rising equities, renewed appetite for riskier assets and US indicators.
That of the ten-year German Bund ended at 2.413% and its French equivalent at more than 3%, both at their highest for more than two weeks.
The ten-year American gained almost six basis points around 3.638%.
The oil market fell after taking nearly 3% the day before: Brent lost 1.21% to 76.03 dollars a barrel and American light crude (West Texas Intermediate, WTI) 1.14% to 72 dollars.
(Laetitia Volga, edited by Camille Raynaud)
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