PARIS (Reuters) – European stock markets ended higher on Friday as investors digested the latest data from both sides of the Atlantic, ahead of inflation in the euro zone and the United States on Friday.

In Paris, the CAC 40 rose by 0.84% ​​to 7,640.95 points, while the German Dax rose by 0.64% and the British Footsie strengthened by 0.43%.

The EuroStoxx 50 index ended the session up 1%, while the FTSEurofirst 300 gained 0.79% and the Stoxx 600 gained 0.74%.

In the eurozone, inflation in Germany was weaker than expected, with prices falling by 0.2% month-on-month in August, according to the HICP indicator. The inflation indicator for Europe’s largest economy is closely followed by investors, as it provides a trend for price dynamics in the eurozone.

Eurozone inflation will be released at 0900 GMT on Friday, and will be key to the path of European Central Bank rates. Investors are expecting 65 basis points of easing this year, money markets say, and a weaker-than-expected reading would encourage the central bank to ease rates further to support euro zone activity.

The indicators published on Thursday in the United States, on the other hand, temper investors’ hopes of a rate cut.

True, core PCE inflation was weaker than initially forecast in the second quarter, at 2.8%. But the resilience of the economy, which grew 3% from April to June, suggests that the Federal Reserve will not have to cut rates sharply to support activity.

The PCE inflation indicator for July, due Friday, will be key in determining the extent of rate cuts that markets can expect in 2024.

A WALL STREET

Wall Street is up mid-session, with stronger-than-expected GDP growth in the second quarter reassuring on the American outlook.

At the time of the European closing, trading on the New York Stock Exchange indicated a 0.75% increase for the Dow Jones, against 0.7% for the Standard & Poor’s 500, and 0.98% for the Nasdaq Composite.

VALUES

Pernod Ricard ended up 1.6% after publishing results in line with expectations, the group having also reiterated its medium-term objectives. Technology ended at the top of the Stoxx 600, rising 2.1%, reassured by Nvidia’s figures in line with the consensus. Teleperformance fell 6.4% after announcing on Wednesday the separation of the functions of chairman and CEO. ID Logistics fell 7.2% after its first-half results, the group citing the cost of recent start-ups, which weighed in particular on operations in France. Delivery Hero gained 12.9% after the group announced a plan to list its Emirati subsidiary Talabat on the Dubai Stock Exchange in the fourth quarter.

RATE

U.S. yields rose as investors worried that the Federal Reserve would not cut rates as much as hoped this year after better-than-expected economic data.

The yield on the German ten-year bond rose by 2.9 bp to 2.283%, while the two-year rate fell by 1.4 bp to 2.364%.

At the time of the European closing, the yield on the ten-year Treasury rose 4.1 bp to 3.8825%, while the yield on the two-year note rose 3.3 bp to 3.9001%.

CHANGES

The dollar is strengthening, supported by good activity figures which keep a significant easing from the Fed at bay, while the euro is declining under pressure from weaker-than-expected German inflation figures.

The dollar gained 0.32% against a basket of benchmark currencies, the euro eroded 0.38% to $1.1078, and the pound sterling lost 0.16% to $1.3169.

OIL

Crude is advancing, supported by US data and the interruption of most of Libya’s oil production, as the country’s different factions clash for control of oil revenues.

Brent rose 2.1% to $80.3 per barrel, while American light crude (West Texas Intermediate, WTI) rose 2.56% to $76.43.

TO BE CONTINUED FRIDAY:

(Written by Corentin Chappron, edited by Sophie Louet)

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