PARIS (Reuters) – Stock market indices ended in scattered order on Thursday in Europe, where the market climate remains dominated by pending announcements from the US Federal Reserve.
In Paris, the CAC 40 gained 0.27% to 7,222.15 points. The British Footsie lost 0.32% and the German Dax gained 0.18%.
The EuroStoxx 50 index advanced 0.13%, the FTSEurofirst 300 0.02% and the Stoxx 600 fell 0.02%.
At the time of the close in Europe, Wall Street was moving in the green, the Dow Jones winning 0.2%, the Standard & Poor’s-500 0.34% and the Nasdaq Composite 0.9%.
Growth stocks are doing well there, benefiting from the decline in Treasury bond yields.
The relaxation is general on the bond markets after the announcement of a larger than expected increase in weekly jobless claims in the United States, to 261,000, their highest since October 2021.
This indicator, by suggesting a slowdown in the labor market, somewhat calms the burst of uncertainty that is gaining investors regarding the Fed’s decision next Wednesday.
The unexpected rate hikes decided by the central bank of Canada and Australia raise fears that the American institution is taking the same path. Markets are pricing the odds of the Fed taking a break next week at 64%, up from 78% on Wednesday, according to the FedWatch Barometer. However, they are expecting a 25 basis point increase in July.
“There is a realization that a pause does not mean the end (of the rate hike cycle),” said Kit Juckes, at Societe Generale, adding that traders are also questioning the long-established thesis. that the Fed will stop raising rates long before the European Central Bank.
SURVEY-ECB expected to hike rates in June and July
In terms of sector performance in Europe, the Stoxx telecoms index (-1.11%) posted the largest drop and that of the automobile the best progression (+0.99%).
The Chinese Ministry of Commerce has announced the launch of a national campaign to encourage the purchase of vehicles. In Paris, Stellantis took 1.51% and Renault 1.09%.
RATES/EXCHANGES Bond yields are trending down in the United States, penalized by the assumption of prolonged monetary tightening by the Fed. The ten-year fell five basis points to 3.7237%.
The ten-year Bund yield, the benchmark in Europe, fell to 2.42% at the end of the day.
On the foreign exchange market, the dollar lost 0.7% against a basket of currencies, allowing the euro to rise to 1.0777.
THE INDICATORS OF THE DAY
Main macro fact of the day, the eurozone economy entered recession in the first quarter, according to final figures from Eurostat, which lowered the evolution of gross domestic product for this period to -0.1% but also for the last three months of 2022.
The oil market gives ground in reaction to a press report according to which Iran and the United States are about to conclude a temporary agreement allowing to ease the sanctions against Tehran – in particular on the export of crude oil – in exchange for a reduction in uranium enrichment activities.
Brent lost 1.7% to $75.64 a barrel and WTI 2.07% to $71.03.
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