by Augustin Turpin

(Reuters) – European stock markets ended mixed on Monday, while Wall Street was in the green at mid-session, in a context of optimism linked to the first cut expected on Thursday in interest rates from the European Central Bank (ECB).

In Paris, the CAC 40 ended up 0.06% at 7,998.02 points. The British Footsie lost 0.10% and the German Dax advanced 0.61%.

The EuroStoxx 50 index gained 0.43%, the FTSEurofirst 300 0.31% and the Stoxx 600 0.33%.

All eyes were on the ECB, for which it is considered almost certain that it will reduce its key rate by a quarter of a point to 3.75% on Thursday.

However, the latest figures released last week revealed signs of persistent inflation in the euro zone, leaving doubt over the scenario of a series of rapid cuts. The markets are now counting on an easing of less than 60 basis points, or two cuts of 25 basis points, and consider the chances of seeing a third to be less than 50%.

“Risks are relatively positive at the start of the week, which appears to be a continuation of the positive momentum seen on Friday, although this is somewhat surprising given the busy schedule of upcoming events,” said Michael Brown, strategist at the Pepperstone broker in London.

“The ECB’s decision is perhaps the most important event to watch, especially after last week’s inflation data increases the risk that the ECB will cut interest rates just once this year, after a reduction of 25 basis points on Thursday,” added Michael Brown.

Sentiment is driven by the acceleration of manufacturing activity in China, where it has grown at the fastest pace in two years, as well as by the start of a perceptible improvement in the manufacturing sector in the euro zone.

VALUES

In the wake of the progression of the Nasdaq in the United States, the technology compartment (0.86%) is among the strongest sectoral increases in Europe.

Conversely, the pharmaceutical sector fell 0.25%, weighed down by GSK’s 9.54% plunge after a Delaware judge authorized more than 70,000 lawsuits concerning Zantac, a drug against burns. stomach that is no longer used.

Atos fell 18.31% after announcing that it would give itself until Wednesday to examine two revised financial restructuring offers, which put into competition the company EP Equity Investment (EPEI) controlled by Czech businessman Daniel Kretinsky and a consortium led by Onepoint and its director, David Layani.

A WALL STREET

At closing time in Europe, the Dow Jones lost 0.64%, the Standard & Poor’s 500 0.16% and the Nasdaq Composite gained 0.08%.

In terms of values, Gamestop soars by more than 29%, a publication by influencer Keith Gill, known as “Roaring Kitty”, on Reddit having shown ongoing bets worth $116 million on the distributor video games. In the wake of Gamestop, Reddit takes 2%, Robinhood 3.42% and AMC 13.4%.

TODAY’S INDICATORS

The survey published Monday by S&P Global indicated that the French manufacturing sector, currently in difficulty, could soon see a recovery.

Also according to S&P Global, Germany’s manufacturing sector, which represents about a fifth of Europe’s largest economy, showed encouraging signs in May, with production and new orders declining at a much slower pace than the previous month.

The survey also found that Britain’s manufacturing sector moved into positive territory in May after a long decline, but rising prices charged by businesses could prompt the Bank of England (BoE) to be more cautious about a possible reduction in its key rates.

Across the Atlantic, the monthly survey from the Institute for Supply Management (ISM) showed that manufacturing activity in the United States contracted in May for a second consecutive month, with new orders for goods recording their highest sharp decline for almost two years.

CHANGES

The dollar fell (-0.47%) against a basket of reference currencies, while the euro gained (0.42%) to 1.0886 dollars.

RATE

Bond yields in the euro zone are falling with operators’ renewed anticipation of ECB rate cuts.

The yield on the German ten-year lost 0.9 basis points (bp) to 2.5760%, that of the two-year lost 0.7 bp to 3.0280%.

The American bond markets do the same, the ten-year bond market losing 10.8 basis points to 4.4041%, and the two-year bond market losing 7.5 bp to 4.8184%.

OIL

The oil market is declining despite OPEC+’s decision to extend its production cuts until 2025: Brent fell by 3.42% to $78.34 per barrel and American light crude (West Texas Intermediate, WTI) fell by 3.65% to $74.18.

(Writing by Augustin Turpin, edited by Kate Entringer)

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