PARIS (Reuters) – European markets ended sharply lower on Wednesday, despite encouraging comments from European monetary policy makers, with Friday’s publication of US inflation weighing on sentiment.
In Paris, the CAC 40 lost 0.69% to 7,609.15 points, while the German Dax fell by 0.08% and the British Footsie by 0.27%.
The EuroStoxx 50 index ended the session down 0.37%, compared to 0.48% for the FTSEurofirst 300 and 0.53% for the Stoxx 600.
Several members of the Governing Council of the European Central Bank (ECB) stressed on Wednesday that inflation would continue to slow and that the central bank could continue to ease its rates.
Olli Rehn, Fabio Panetta and Philip Lane thus recalled that inflation should eventually return to its target in the medium term and that the process of normalization of monetary policy in the euro zone should continue.
However, European assets suffered from the caution of investors, who are positioning themselves for the next PCE inflation figure in the United States, expected on Friday.
While the week was poor in economic indicators, indicators of price dynamics above consensus in Canada and Australia have revived fears that US inflation will prove persistent, further postponing a cut in interest rates. the Federal Reserve.
Nervousness also dominates in Europe before the first round of the French legislative elections this Sunday.
“The good news for the euro zone is that political uncertainty in France does not lead to a tightening of financial conditions and even less to systemic stress,” notes Xavier Chapard, strategist at LBPAM, who notes that the systemic stress indicator of the ECB barely reacted to the dissolution of the Assembly.
As it stands and barring any surprises, “the impact on the economic outlook for the euro zone should be limited”, concludes the strategist.
A WALL STREET
Wall Street hesitates mid-session, as investors position themselves before the next PCE inflation publication for June, while Nvidia supports the technology sector.
At closing time in Europe, trading on the New York Stock Exchange indicated a drop of 0.13% for the Dow Jones, against 0.1% for the Standard & Poor’s 500, and an increase of 0.13 % for the Nasdaq Composite.
VALUES
Nvidia’s rebound supported tech stocks, with the sector index being the only sector to post a positive performance, of 0.36%.
Bouygues finished at the bottom of the CAC 40, dropping 2.87%, after JPMorgan lowered its price target on the group.
Atos announced in a press release on Wednesday that it had received a revised global financial restructuring proposal from its creditors taking into account the end of discussions with Onepoint, Butler Industries and Econocom, and fell 4.92%.
Jefferies raised its recommendation and its price target on Future, which gained 9.47%, among the best performances of the Stoxx 600.
Bavarian Nordic filed an application for marketing authorization for a vaccine against chikungunya, which propelled the group by 17.14%.
Volkswagen fell 1.78% as investors worried about the cost and uncertainties of a joint venture with US electric vehicle maker Rivian.
Alfen, an energy storage specialist and electric vehicle infrastructure provider, on Wednesday cut its revenue and Ebitda forecasts for this year and collapsed by 46.9%.
RATE
US yields are rising sharply, supported by higher-than-expected inflation figures released this week in Canada and Australia, while $183 billion of debt is due to be issued this week.
At the close of the interest rate markets in Europe, the ten-year Treasury yield rose 7.8 bp to 4.3157%, compared to 6 bp for the two-year rate, to 4.7514%.
The yield on the German ten-year rose by 4 bps to 2.452%, while that of the two-year rate remained stable at 2.823%.
CHANGES
The dollar strengthened and hit its highest level since early May, supported by fears that inflation could prove more persistent than expected across the Atlantic.
The dollar gained 0.4% against a basket of benchmark currencies, while the euro lost 0.3% to $1.0681. The pound fell 0.5% to $1.262.
OIL
Crude declined as figures released Wednesday from the Energy Information Administration showed that U.S. oil inventories rose by 3.6 million barrels last week, compared with expectations for a decline of 2.9 million barrels.
Brent fell by 0.35% to $84.71 per barrel, while US light crude (West Texas Intermediate, WTI) fell by 0.48% to $80.44.
(Written by Corentin Chappron, edited by Tangi Salaün)
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