by Claude Chendjou

PARIS (Reuters) – The main European stock markets, except London, rebounded on Tuesday at the close, while on Wall Street the indices were moving in disorder at mid-session in the run-up to the monetary policy decision of the American Federal Reserve (Fed).

In Paris, the CAC 40 ended with a gain of 0.42% at 7,474.94 points. The British Footsie, which ended in the green on Monday, fell back by 0.22% on Tuesday, penalized by basic resources. The German Dax gained 0.56%.

The EuroStoxx 50 index rose by 0.53%, the FTSEurofirst 300 by 0.43% and the Stoxx 600 by 0.45%.

The positive trend in Europe was supported by almost all major sectors, particularly cyclical sectors such as industry (+0.89%) and finance (0.92%) after the publication of contrasting indicators in the eurozone. The monetary bloc’s gross domestic product (GDP) notably grew in the second quarter at a rate higher than the consensus, by 0.3% compared to the previous quarter.

At the time of the European closing, the Dow Jones gained 0.02%, but the Standard & Poor’s 500 fell by 0.79% and the Nasdaq lost 1.42% in a context of caution before the publication in the evening of Microsoft’s results which will follow those of Meta, Apple and Amazon during the week.

The new technology index on Wall Street fell 2.22% as investors continued to fear an overvaluation of the “Magnificent Seven” that fueled the stock market rally. The financial sector (+0.93%) and the banking sector (+1.35%) were, however, well oriented as the Fed is due to make its monetary policy decision on Wednesday after two days of debates. While a status quo on rates is widely expected, investors are hoping that the Fed will give signs in favor of a reduction in borrowing costs in September.

VALUES IN EUROPE

Diageo plunged 5.08% after announcing a drop in its annual profit, dragging down Pernod Ricard (-1.99%). Rexel fell 6.82% on the SBF120 after a drop in half-yearly sales, while Imerys ended in the red (-2.25%) due to forecasts deemed “disappointing”.

Standard Chartered jumped 5.94% after announcing a share buyback plan after a rise in its half-year profit.

TODAY’S INDICATORS

The number of job openings in the United States fell in June to 8.184 million, after 8.230 million in May and a consensus of eight million, according to the latest “Jolts” report.

Consumer confidence in the United States improved in July, with the index at 100.3, according to the monthly survey by the Conference Board.

German inflation, calculated according to European standards, unexpectedly accelerated in July to 2.6% over a year and 0.5% over a month, according to preliminary data from the Federal Statistical Office.

Economic sentiment in the eurozone deteriorated slightly in July, to 95.8 according to data from the European Commission.

CHANGES

The dollar rose on Tuesday, by (+0.05%), against a basket of reference currencies, to its highest level since around mid-July.

The euro fell 0.13% to $1.0805 as traders digested a series of mixed data from Europe.

The pound sterling is stable at $1.28275 (-0.25.01%), ahead of the Bank of England (BoE) meeting on Thursday.

The yen weakened slightly on Tuesday to 153.78 (-0.15%) per dollar, on the eve of the Bank of Japan (BoJ) decision, while the probability of a 10 basis point increase in the institution’s rates is just over 50%.

RATE

The yield on the two-year German Bund hit a February low of 2.551% on Tuesday after economic data from several countries in the region confirmed a mixed backdrop and prompted investors to slightly increase their bets on a further rate cut by the European Central Bank (ECB).

The German ten-year rate ended at 2.34% (-2 basis points) and the two-year rate at 2.552% (-4 basis points).

In the United States, yields on 10-year and 2-year US Treasury bonds each fell by about a basis point, to 4.1666% and 4.3729% respectively, ahead of a number of data scheduled for Wednesday, including a major auction.

OIL

The oil market is at its lowest level since early June, with concerns about demand in China outweighing the prospect of lower U.S. inventories of crude and derivatives.

Brent fell by 1.65% to $78.46 per barrel and US light crude (West Texas Intermediate, WTI) by 1.52% to $74.66.

(Written by Claude Chendjou, edited by Kate Entringer)

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