PARIS (Reuters) – European stock markets ended scattered on Tuesday, after an inflation indicator in the euro zone fell for November and new construction increased in the United States, which gave hope that a soft landing in developed economies remains possible.

In Paris, the CAC 40 gained 0.08% to 7,574.67 points, while the German Dax gained 0.56% and the British Footsie 0.31%.

The EuroStoxx 50 index ended the session with an increase of 0.35%, compared to 0.4% for the FTSEurofirst 300 and 0.43% for the Stoxx 600.

Investors welcomed a lower than estimated inflation indicator in December for the euro zone, a decline which reinforces the European Central Bank in its latest monetary policy decision, and which fuels bets on an imminent reduction in key rates in the euro zone.

In the United States, the number of new housing constructions surprised on the rise and reached a high in a year and a half, a paradoxical situation while the Federal Reserve rates remain at their highest level for this cycle monetary tightening.

The markets see this as confirmation that activity will be able to slow down without accident in the United States, bringing inflation under control without too significant a deterioration in the economy.

This soft landing scenario encourages risk-taking, despite an increase in geopolitical tensions.

Investors this week will await consumer confidence on Wednesday, final GDP for the third quarter on Thursday and, on Friday, PCE inflation, consumption of durable goods and the final sentiment index from Michigan in the United States. UK inflation is expected on Wednesday.

VALUES

Virbac climbed 12.01% to the top of the SBF120 after the animal health specialist raised its outlook for turnover and operating profit ratio thanks to a “significant rebound in sales observed in third quarter and continuing into the fourth quarter.

Casino fell 8.24%, at the bottom of the SBF120, while the group is discussing with Les Mousquetaires and Auchan to sell its super and hypermarkets.

Sodexo announced on Tuesday that the listing on the Paris Stock Exchange of its social benefits division Pluxee would take place on February 1, 2024, which caused the group to decline by 0.71%.

Legrand fell 1.75%, at the bottom of the CAC 40, after UBS lowered its recommendation from “buy” to “sell”.

A WALL STREET

Wall Street advances at closing time in Europe, but gains remain moderate before the publication of numerous indicators this week.

At closing time in Europe, trading on the New York Stock Exchange indicated an increase of 0.56% for the Dow Jones, compared to 0.44% for the Standard & Poor’s 500 and 0.49% for the Nasdaq. Composite.

RATE

Yields are declining after encouraging data from both sides of the Atlantic, which raises hopes that central banks have won their fight against inflation.

At the close of the rate markets in Europe, the yield on the ten-year Treasury fell by 4.3 bp to 3.9126%, compared to a drop of 1.5 bp for the two-year rate, to 4.4415%.

The yield on the German ten-year fell 5.4 bps to 2.02%, while that of the two-year rate eroded by 2.9 bps to 2.518%.

CHANGES

The dollar is declining against a backdrop of returning risk appetite and as the scenario of a soft landing seems increasingly likely.

The dollar lost 0.46% against a basket of reference currencies, while the euro gained 0.49% to 1.0976 dollars. The pound sterling strengthened by 0.87% to $1.2752.

OIL

Crude is rising as markets worry the situation in the Red Sea could force commercial vessels to avoid the area and impact supply chains.

Brent advanced 1.91% to $79.44 per barrel, American light crude (West Texas Intermediate, WTI) gained 2.08% to $73.98.

(Written by Corentin Chappron, edited by Kate Entringer)

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