by Laetitia Volga

PARIS (Reuters) – European stock markets ended higher on Wednesday, as the easing of fears linked to the economic situation outweighed the still offensive tone of central bankers.

In Paris, the CAC 40 gained 0.98% to 7,286.32 points. The British Footsie advanced 0.52% and the German Dax 0.64%.

The EuroStoxx 50 index gained 0.92%, the FTSEurofirst 300 0.69% and the Stoxx 600 0.7%.

The series of strong economic statistics Tuesday in the United States – on consumer confidence, the housing market and durable goods orders – removes in the eyes of investors the specter of an imminent recession of the first world power.

The Chairman of the Federal Reserve also recalled that a recession was not the central scenario of the institution. As part of the annual forum of the European Central Bank in Portugal, Jerome Powell and his colleagues for the euro zone (Christine Lagarde) and the United Kingdom (Andrew Bailey) recalled in unison that other rate hikes were to be expected given the tenacity of inflation.

These words, which are only a repetition of what has been said many times, did not move the markets, either in Europe or in the United States where the S&P-500 index is stable.

VALUES

The European technology index rose 1.92%, the biggest rise of the day, after a Wall Street Journal report that Washington is considering new restrictions on exports of American artificial intelligence chips to China.

ASML gained 2.32% and STMicroelectronics 2.93%. Carrefour, supported by advice from Morgan Stanley to “overweight”, gained 3.01%, at the top of the SBF 120.

EXCHANGES The dollar gained 0.5% against a basket of benchmark currencies, while Jerome Powell did not rule out the possibility of another rate hike in July.

The euro is displayed at 1.0904 dollars, down 0.5%. RATES Yields on European government bonds fell in reaction to the announcement of a slightly larger than expected slowdown in Italian inflation in June, to 6.7% over one year. The ten-year German Bund yield, the benchmark for the euro zone, fell five basis points to 2.314% and its Italian equivalent ended below 4%. “The drop in headline inflation and core inflation in Italy in June is encouraging,” said Franziska Palmas, senior economist at Capital Economics. “That said, the ECB is likely to remain in a hawkish mood. Officials … are clearly concerned about the tightening labor market leading to inflation stickiness in the services sector.” In the United States, the yield on ten-year Treasuries dropped three basis points to 3.7349%. OIL The US Energy Information Agency’s announcement of a sharper-than-expected drop in US crude inventories pushed the price of Brent up 1.85% to $73.6 a barrel and that of American light crude (West Texas Intermediate, WTI) by 2.16% to 69.16 dollars.

TO BE CONTINUED :

(Laetitia Volga, edited by Bertrand Boucey)

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