by Augustin Turpin

(Reuters) – European stock markets ended higher and Wall Street was in the green at mid-session on Thursday, at the end of a session rich in the publication of indicators on services activity in Europe and the United States and in a context of optimism about central bank key rate cuts.

In Paris, the CAC 40 ended up 0.87% at 8,006.57 points. The British Footsie rose by 0.29% and the German Dax by 0.89%.

The EuroStoxx 50 index gained 1.61%, the FTSEurofirst 300 0.91% and the Stoxx 600 0.84%.

At closing time in Europe, the Dow Jones gained 0.14%, the Standard & Poor’s 500 0.77% and the Nasdaq Composite 1.41%.

Tuesday’s publication of the Jolts report on job vacancies, which revealed a decline in the number of vacancies in April, gave a signal of an easing in the labor market – an element which fuels the prospect of a fall in rate this year.

Reinforcing sentiment, the Bank of Canada (BoC) cut its key rate by 25 basis points to 4.75%, the first cut in four years, while paving the way for further monetary easing measures if the inflation continued to slow.

A cut in key rates following the next budgetary policy meeting of the European Central Bank (ECB) on Thursday is considered almost certain.

Markets are now pricing in an easing of around 44 basis points this year. Additionally, expectations for a September rate cut are now around 65%, up from less than 50% last week, according to the CME’s FEDWATCH tool.

In terms of values, Inditex, the owner of Zara, gained 3.73%, the group’s sales at constant exchange rates having increased by 12% between May 1 and June 3. Centrica dropped 4.81%, the energy group’s forecasts being entirely in line with expectations.

Elekta plunges 18.04% as the Swedish radiotherapy equipment maker reports a larger-than-expected drop in fourth-quarter profit, while ASML gains 8.04% after Jefferies said the CFO of the Dutch semiconductor maker provided positive updates on ongoing discussions with TSMC during a small-group call.

A WALL STREET

Digital giants like Nvidia, Microsoft and Amazon, sensitive to rates, take between 0.8% and 3.01%.

Hewlett Packard soars 12.41% after announcing on Tuesday that it expects a turnover higher than expectations in the third quarter, driven by demand for its artificial intelligence servers.

TODAY’S INDICATORS

Growth in China’s service sector activity accelerated in May to its fastest pace in ten months, a private survey showed.

Industrial production recorded an increase of 0.5% in April, according to data from INSEE.

The monthly S&P Global survey revealed a contraction in Russia’s services sector in May, while in France it contracted over the same period.

In Germany, activity in the services sector recorded its strongest growth in a year in May. Across the Channel, it slowed in May after reaching an 11-month high in April.

In the euro zone, the S&P Global survey showed that economic activity recorded its fastest growth in a year in May. Furthermore, according to Eurostat data, producer prices in the euro zone fell at a more sustained pace than expected in April.

The private sector in the United States created fewer jobs than expected in May, according to ADP’s monthly survey, while data from the Institute for Supply Management (ISM) showed that the services sector United States resumed growth in May.

CHANGES

The dollar advances (0.22%) against a basket of reference currencies, driven by data on the activity of the American services sector, while the euro is almost stable (0.08)% at 1.0869 dollar.

RATE

The ten-year German Bund yield is stable at 0.2 basis points (bps) at 2.4990%, with the two-year yield losing 0.4 bps to 2.9720%. US bond markets are falling, with the ten-year Treasury dropping 4.7 bps to 4.2890%.

OIL

The oil market is erasing its losses after approaching a four-month low in Asian trade, as investors continue to digest Sunday’s OPEC+ decisions.

Brent rose 0.46% to $77.88 per barrel, with American light crude (West Texas Intermediate, WTI) increasing 0.45% to $73.58 CLc1.

(Written by Augustin Turpin)

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