PARIS (Reuters) – European stocks ended close to balance on Wednesday, with some investors opting to stay on the sidelines as attention turns to U.S. inflation and the Federal Reserve meeting due next week.
In Paris, the CAC 40 lost 0.09% to 7,202.79 points. The British Footsie fell 0.05% and the German Dax lost 0.2%.
The EuroStoxx 50 index fell by 0.08%, the FTSEurofirst 300 by 0.19% and the Stoxx 600 by 0.19%.
The declining monthly figures for Chinese foreign trade published at the start of the day are worrying with the sharper than expected decline in exports (-7.5% against -0.4% for the Reuters consensus), which in the eyes of many experts reflects the impact of the economic downturn.
On the New York Stock Exchange, at the time of the close in Europe, the Dow Jones nibbled 0.14%, the S&P-500 fell by 0.12% and the Nasdaq Composite by 0.48%.
Markets could remain in a waiting position until the publication next week of two key events for investors: US inflation for the month of May (Tuesday) and the conclusions of two days of committee meetings. from the Fed (Wednesday).
The Reuters survey of economists shows that a large majority of respondents anticipate a central bank status quo. Opinions are more divided regarding the July meeting.
“Markets are pricing a relatively low probability of a June hike and are giving more credit to a July hike,” Citi economists said.
“But elsewhere monetary policy illustrates both the economic peril of a premature pause and the risk of a resurgence of inflation that could trigger surprise rate hikes,” they continued, quoting central banks from Australia and Canada as an example.
The latter, on hiatus since January, decided to raise its key rate to 4.75% in the face of the reacceleration of the CPI index, surprisingly resilient consumption, the recovery in demand for services and a tight labor market.
VALUES
On the stock market, the distribution sector (+2.01%) posted the largest increase of the day, driven by Inditex whose index took 5.69%. The owner of the Zara and Massimo Dutti brands has published growth in its quarterly net profit above expectations.
In London, Vodafone gained 2.03% after a Reuters report that the group and Hutchison are in the final stages of a deal to merge their UK operations.
RATE
Government bond yields rise after the Bank of Canada’s decision to raise its rate by a quarter point, “reminding markets that the cycle of hikes is not over”, stressed Pooja Kumra, strategist at TD bank.
In the United States, the ten-year German rose to 3.77% against 3.7% at the close on Tuesday. Its German equivalent ended the day at 2.443%, up seven basis points.
CHANGES
The dollar is stable against other major currencies, expecting the Fed meeting and US inflation next week. The euro is trading around $1.0705.
Cryptocurrencies remain under pressure after lawsuits by the SEC, the watchdog of Wall Street, against Coinbase and Binance for not declaring their exchange platform in the United States.
Bitcoin, at $26,298, lost 3.44%. Binance’s BNB token drops 5.48%.
OIL
The oil market remains supported by Saudi Arabia’s unexpected commitment to further cut supply in July.
Brent gained 1.55% to $77.47 a barrel and US light crude (West Texas Intermediate, WTI) 1.77% to $73.01.
(Laetitia Volga, edited by Jean-Stéphane Brosse)
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