by Claude Chendjou

PARIS (Reuters) – The main European stock exchanges are in the green on Monday at mid-session but without much conviction in the absence of Wall Street and the London market, while the day is poor in indicators pending the monthly figures of inflation in Europe and the United States.

In Paris, the CAC 40 rose 0.13% to 8,105.48 around 10:30 GMT. In Frankfurt, the Dax advances 0.10%.

The pan-European FTSEurofirst 300 index rose by 0.06% and the eurozone’s EuroStoxx 50 by 0.07%. The Stoxx 600, led by the energy (+0.86%) and “utilities” (community services) (+0.71%) compartments, nibbled 0.05%.

In London, the FTSE is closed for the “Spring Bank Holiday”, while Wall Street extends the Friday evening break due to “Memorial Day”, which limits trading volumes on open stock exchanges.

The only major indicator of the day, the morale of German entrepreneurs stagnated in May, contrary to expectations, with an Ifo index at 89.3, after three consecutive months of increase.

Investors are especially awaiting end-of-week statistics on US GDP and inflation on both sides of the Atlantic while last week was dominated by doubts about the pace of the expected cut in bank key rates central banks, causing tensions in the bond compartment.

Philip Lane, the chief economist of the European Central Bank (ECB) estimated, in an interview with the Financial Times on Monday, that the institution’s monetary policy must remain restrictive this year due to wage growth which is not will not normalize before 2026. He must speak again today before the Institute of International and European Affairs.

The ECB has practically committed to lowering its rates at the end of its meeting on June 6, but uncertainties remain beyond this deadline.

“If inflation proceeds as expected, this week’s data will most likely change expectations beyond June (rather than at the June meeting (itself),” predicts Ipek Ozkardeskaya, market analyst at Swissquote Bank .

VALUES IN EUROPE

In Paris, Alstom jumped 4.14% following the announcement of the launch of a capital increase of one billion euros which should allow it to straighten out its finances.

Stellantis is up 0.94% as the car manufacturer should soon commit to increasing its annual vehicle production in Italy to one million units.

In Zurich, Temenos takes 1.31%, the activist investor Petrus Advisers having increased its stake in the Swiss banking software group from 3.4% to more than 5%.

EFG International gained 3.92% and Julius Baer lost 1.58%, sources having reported the holding of discussions between the two groups with a view to a possible acquisition of the first by the second, even if the negotiations are now interrupted.

RATES Sovereign bond yields in the euro zone, which rose significantly last week, are struggling to find direction on Monday before key data expected at the end of the week.

That of the German Bund at ten years is practically unchanged at 2.569%, just like that at two years which appears at 3.076%.

Money markets are currently pricing in around two ECB rate cuts of a total of 58 basis points by the end of the year with a high probability, while the probability of a third reduction is only d ‘about 30%.

FOREIGN EXCHANGES The dollar retreats slightly on Monday and is expected to post its first monthly loss (-1.5% in May) this year, as investors focus on inflation data from the United States, Europe and Japan to guide the global outlook in terms of interest rates.

The dollar lost 0.07% against a basket of reference currencies, while the euro gained 0.06%, to 1.0852 dollars, and the pound sterling traded at 1.2749 dollars (+0.07% ).

OIL

Oil prices are rebounding after a gloomy week, marked in particular by the Fed’s “minutes” which showed that certain central bank officials were ready to further raise interest rates to control inflation considered high.

Brent, which lost around 2% last week, rose 0.54% on Monday to 82.56 dollars per barrel, while American light crude (West Texas Intermediate, WTI) advanced 0.55% to 78, 15 bucks.

NO MORE ECONOMIC INDICATORS ON THE AGENDA FOR MAY 27

(Written by Claude Chendjou, edited by Sophie Louet)

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