by Laetitia Volga

PARIS (Reuters) – European stocks rose on Thursday as encouraging US inflation reignited speculation that the Federal Reserve will not raise rates next month.

In Paris, the CAC 40 gained 1.52% to 7,433.62 points. The British Footsie gained 0.41% and the German Dax 0.91%.

The EuroStoxx 50 index advanced 1.55%, the FTSEurofirst 300 0.78% and the Stoxx 600 0.79%.

In the United States, the major Wall Street indices took between 0.6% and 0.7% at the time of the European close.

Consumer price inflation accelerated to 3.2% year-on-year, but economists polled by Reuters on average expected a larger increase, to 3.3%.

If we exclude food and energy, the price index is up 4.7% over the 12 months to the end of July, after rising 4.8% a month earlier.

More and more investors are anticipating the Fed’s interest rate status quo in September, according to the FedWatch barometer.

“There is no new information in this inflation report that should cause the Fed to raise rates further. The numbers themselves show a deceleration and that should be enough for the central bank to pause,” said Marcus Poppe, at DWS.

In addition, jobless claims across the Atlantic rose more than expected last week, to 248,000.

VALUES

On the stock market, Kering, Hermès and LVMH took from 2.21% to 3.43%. China has decided to lift the ban on group travel to several countries, including the United States and Japan, which could boost sales for luxury groups

The European insurance sector posted the biggest gain of the day, with a gain of 1.95% for its Stoxx index. Allianz gained 4.9% and took the lead in the Dax after reporting half-year operating profit that beat expectations.

On the other hand, Siemens published a disappointing quarterly profit, leading to a 4.79% decline in its share price.

CHANGES

If equities rise, the dollar suffers from the prospect of an imminent end, or even already there, of the rise in US key rates. It lost 0.24% against a basket of major benchmark currencies.

The euro rose 0.38% against the greenback at 1.1015, after hitting a two-week high at 1.1064.

RATE

On the government bond market, Treasuries yields are relatively stable after the inflation figures, at 4.0185% for ten-year securities and 4.7765% for the two, down slightly.

The ten-year German Bund yield ended the day higher, around 2.5%.

OIL

Oil prices fell slightly after hitting multi-month peaks the day before, notably under the effect of new production cuts recently announced by Saudi Arabia and Russia.

Brent lost 0.63% to 87 dollars a barrel and American light crude (West Texas Intermediate, WTI) 0.98% to 83.57 dollars.

(Laetitia Volga)

Copyright © 2023 Thomson Reuters