PARIS (Reuters) – European stocks ended on a hesitant note on Friday, after a week rich in data and before a decisive monetary policy decision by the European Central Bank (ECB).

In Paris, the CAC 40 gained 0.62% to 7,240.77 points, while the German Dax rose by 0.14%. The British Footsie gained 0.49%.

The EuroStoxx 50 index ended the session with an increase of 0.38%, ending seven consecutive sessions in the red, against a gain of 0.2% for the FTSEurofirst 300 and 0.22% for the Stoxx 600.

Over the week, the CAC 40 lost 0.72% and the Stoxx 600 0.76%.

US data released this week again showed activity resilient to rate hikes, as inflation slows and tensions in labor markets begin to ease.

The ideal scenario of a soft landing therefore seems to be confirmed, and the inflation data, expected on Wednesday, could encourage this outlook.

This data will be all the more important as it will be the last inflation release before the Federal Reserve’s decision on Wednesday, September 20.

In the euro zone, on the other hand, activity and sentiment continue to slump, as shown by the final PMI indicators for the month of August, while inflation remains above the target for the ECB and that the rise in oil prices coupled with the weakening of the euro could revive inflationary fears.

The ECB will have to decide on Thursday as the dissension between the members of its board of governors increases, and choose to raise its rates or put a hold on its monetary tightening, the money markets favoring the second option.

“Two factors favor a pause: several usually restrictive officials will not be eligible to vote next week under the Bank’s rotating voting system. Second, the only possible compromise seems to be a pause coupled with a restrictive message, which would prevent an immediate rise,” said Felix Feather, European economic analyst at abrdn.

VALUES

Computacenter jumped 15.31%, topping the Stoxx 600, after the IT services provider said its half-year adjusted pretax profit rose 8.8%.

Barclays initiated coverage of Swedish engineering group Alfa Laval, recommending “overweight”, and Finnish group Wartsila, recommending “underweight”, citing cyclical and circular support factors for the former, and misguided market perceptions for the second. Wartsila lost 5.09%, among the worst performers in the Stoxx 600, while Alfa Laval lost 0.54%.

AT WALL STREET

Wall Street advances on closing time in Europe, supported by tech stocks advancing as investors position themselves ahead of the release of inflation data on Wednesday.

At the time of closing in Europe, trading on the New York Stock Exchange indicated an increase of 0.28% for the Dow Jones, against 0.37% for the Standard & Poor’s 500 and 0.57% for the Nasdaq. Composite.

RATE

Risk aversion is benefiting US yields, which are declining.

The ten-year Treasury yield fell 2.8bp to 4.2344%, while the two-year rate was stable at 4.9485%.

The German ten-year yield fell 2.1 bp to 2.597%, while that of the two-year rate fell 2 bp to 3.067%.

CHANGES

The diverging economic trajectories between the euro zone and the United States are widening the gap between the euro and the dollar, with the single currency heading for its eighth consecutive weekly decline against the greenback.

The dollar fell -0.1% against a basket of benchmark currencies but is still expected to register its eighth weekly rise, the longest streak since 2014.

The euro climbed 0.07% to $1.0706, and the pound was stable at $1.2471.

OIL

Crude is not reacting to the deterioration of the economic outlook in Europe and China but is progressing, supported by the decision of Saudi Arabia and Russia to adjust their production according to market conditions.

Brent rose 0.9% to 90.73 dollars a barrel, US light crude (West Texas Intermediate, WTI) rising 0.87% to 87.63 dollars.

(Written by Corentin Chapron)

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