by Claude Chendjou

PARIS (Reuters) – The main European stock markets, with the exception of London, ended higher on Tuesday with the decline in bond yields, while on Wall Street the indices were volatile at the end of the morning in New York in anticipation of the publication at the end of the week of the American employment report.

The positive trend in Europe was supported by values ​​and technologies (+0.90%), luxury (+1.15%) and real estate (+1.72%) following the declarations of Isabel Schnabel , member of the board of governors of the Central Bank (ECB), who considered a new rate increase in the euro zone “unlikely” given the decline in inflation. An ECB survey further showed that consumers’ inflation expectations remained stable in November.

In Paris, the CAC 40 ended with a gain of 0.74% to 7,386.99 points. The German Dax advanced 0.78%. The British Footsie, on the other hand, lost 0.31%, penalized in particular by the decline in the European basic resources compartment (-0.89%). The London Stock Exchange was also briefly affected by a technical incident on small caps.

The EuroStoxx 50 index increased by 0.82%, the FTSEurofirst 300 by 0.32% and the Stoxx 600 by 0.38%.

At the close in Europe, the Dow Jones fell by 0.41% and the Standard & Poor’s 500 by 0.18%, while the Nasdaq was stable (+0.08%) in a session marked by wait-and-see attitude. and profit taking before the publication on Friday of the report on job creations, the unemployment rate and wages for the month of November in the United States.

“We are in a bit of a wait-and-see attitude when it comes to the employment numbers. With the lack of new catalysts, it is difficult for investors to stay and not take profits,” notes Art Hogan, strategist of markets at B Riley Wealth.

The US Department of Labor’s Job Openings and Labor Turnover Survey showed Tuesday that the number of job openings in the country fell in October to its lowest level since the start of 2021, a sign of easing on the labor market, one week before the monetary policy meeting of the American Federal Reserve (Fed).

VALUES

In Paris, Carmat climbed 32.19% after the announcement of a new production site for its artificial heart which should allow it to achieve its objectives.

Nokia fell by 5.94% and Ericsson jumped by 6.08%, the American telecoms operator AT&T having announced that it had preferred the Swedish group to the Finnish equipment manufacturer for a major contract.

The banks HSBC (-0.11%) and Prudential (-1.25%), exposed to China, ended in decline after the Moody’s agency lowered the outlook for China’s rating.

TODAY’S INDICATORS

U.S. services sector activity rose in November to 52.7, but new orders remained stable while a price gauge fell, the Institute for Supply’s monthly survey shows Management (ISM).

In the euro zone, the decline in activity was confirmed in November with a composite PMI index coming out at 47.6 compared to 46.5 in October.

In Great Britain, activity in the services sector increased in November after three months of decline.

Producer prices in the euro zone increased in October, by 0.2% over one month, but showed a decline of 9.4% over one year.

RATE

The yield on the ten-year German Bund, the benchmark for the entire euro zone, ended down more than 11 basis points, at 2.25%, while the two-year yield dropped more than seven points, to 2.618%.

Money markets are now counting with an 80% probability of a 25 basis point cut in ECB rates in March, compared to a probability of 70% on Monday. They are also banking on a rate reduction of 140 basis points (bps) by the end of 2024 compared to 100 bps a week ago.

In the United States, the yield on ten-year Treasuries fell by more than ten basis points, to 4.1858%, whereas it had reached a 16-year peak on October 23, at 5.021%.

EXCHANGES The dollar rose by 0.3% against a basket of reference currencies.

The euro stands at 1.0781 dollars (-0.51%) and the pound sterling at 1.2581 dollars (-0.4%).

The Australian dollar is losing ground (-1.1%) against the American currency, at 0.6546 after the status quo decided by the Australian central bank on its rates.

In cryptocurrencies, bitcoin, which ended Monday at its highest since April 2022, above $42,000, dropped 1.63% on Tuesday, to 42,670.

OIL

Oil prices are rising in response to statements by Russian Deputy Prime Minister Alexander Novak that OPEC+ is ready to amplify its production decline in the first quarter of 2024.

Brent rose 0.32% to $78.28 per barrel and American light crude (West Texas Intermediate, WTI) rose 0.59% to $73.47.

TO BE CONTINUED ON WEDNESDAY:

(Written by Claude Chendjou, edited by Zhifan Liu)

Copyright © 2023 Thomson Reuters