(Reuters) – European stocks ended higher on Monday as investors bet on slowing inflation in the United States and Europe as they await rate decisions from the Federal Reserve (Fed) and the European Central Bank (ECB) this week.
In Paris, the CAC 40 ended up 0.52% at 7,250.35 points. The British Footsie gained 0.11% and the German Dax gained 0.93%.
The EuroStoxx 50 index rose 0.58%, the FTSEurofirst 300 0.1% and the Stoxx 600 0.12%.
The rate decisions of several central banks are on the agenda for the week, with the Fed starting a two-day meeting on Tuesday that will end with a monetary policy statement on Wednesday evening, while the ECB and the Bank of Japan (BoJ ) will speak on Thursday and Friday respectively.
For the Fed, the market expects a pause in June before another 25 basis point hike in July, but the unexpected rate hikes decided last week by the central banks of Australia (RBA) and Canada (BoC) made investors more nervous.
In Europe, the market is betting on another 25 basis point rate hike this month, but the key question remains how many more hikes will follow.
In this context, the data on price developments which will be published this week – Tuesday for the American figures, Friday for those of the euro zone – will be the subject of particular attention.
“Inflation is really moving in the right direction in Europe, and everyone hopes that will also be confirmed in the United States tomorrow,” said Samy Chaar, chief economist at Lombard Odier.
A New York Federal Reserve report released on Monday shows US consumer expectations for inflation a year ahead fell to 4.1% in May, their lowest level in two years, from 4, 4% in April.
VALUES
On the CAC40 Unibail Rodamco Westfield benefited from the raising of Goldman Sachs’ recommendation to “buy” against “neutral”, granting itself a gain of 0.6% on Monday.
TotalEnergies, penalized by the decline in oil prices, dropped 1.8% against a drop of 1.3% for the entire European oil and gas compartment.
Casino, the strongest riser in the SBF 120, climbed again on the stock market on Monday (+10.25%) as press reports reported interest from competitors Auchan and Carrefour for the distribution group, which is already the subject of two takeover offers.
Satellite operator SES for its part recorded the largest drop in the SBF 120 index (-14.5%) after the announcement of the departure of its managing director Steve Collar at the end of the month.
Also in Paris, Nexans soared 8% as BofA’s recommendation to “buy” was raised.
Elsewhere in Europe, Adidas (+5.5%) was supported by Bernstein’s board to “outperform” and UBS ended on a gain of 0.82% after announcing the completion of the acquisition of Credit Suisse, whose share gained 1.1% on its last day of trading on the Zurich Stock Exchange.
AT WALL STREET
At closing time in Europe, the Dow Jones advanced by 0.14%, the Standard & Poor’s 500 by 0.35% and the Nasdaq Composite by 0.76%.
Oracle gained 6.6% to an all-time high as JP Morgan raised its price target to $109 ahead of the group’s fourth-quarter earnings release after the close.
CHANGES
The dollar, which fell 0.5% last week, its worst weekly drop since mid-April, rose on Monday at closing time in Europe (+0.16%) against a basket of currencies of reference before Fed decisions.
The euro is trading at $1.0744 (-0.03%) and the pound sterling at $1.2487 (-0.65%).
RATE
In the euro zone, bond yields ended stable on Monday pending inflation data and central bank meetings.
The yield of the two-year German Bund, which last week touched a peak of almost three months, is displayed at 2.97%, and its ten-year counterpart at 2.38%.
In the United States, yields on ten-year and two-year Treasuries are practically stable, at 3.77% and 4.61% respectively.
OIL
Oil prices retreat ahead of central bank decisions and amid concerns over Chinese demand and rising Russian crude exports to China and India.
Brent fell 2.65% to 72.81 dollars a barrel and US light crude (West Texas Intermediate, WTI) 3.06% to 68.02 dollars.
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(Written by Diana Mandiá, edited by Blandine Hénault)
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