by Claude Chendjou

PARIS (Reuters) – European stock markets ended lower and Wall Street was on a hesitant trend at mid-session, with inflation figures in the United States coming out slightly higher than expected but down, which is puzzling investors.

In Paris, the CAC 40 ended down 0.24% at 7,541.59 points. The British Footsie lost 0.07% and the German Dax lost 0.23%.

The EuroStoxx 50 index fell by 0.25%, the FTSEurofirst 300 by 0.12% and the Stoxx 600 by 0.18%.

At the close in Europe, the Dow Jones fell by 0.07%, the Standard & Poor’s 500 was unchanged and the Nasdaq gained 0.15%, the three indices having been in the red for a while.

The US Department of Labor reported that the Consumer Price Index (CPI) decelerated in September to 2.4% year-on-year and stagnated at 0.2% month-on-month, which in both cases is higher than the expectations of economists polled by Reuters.

After the release of US inflation data, traders now expect an 86.9% probability of a 25 basis point cut in Fed rates in November and a 13.1% probability of a 25 basis point rate cut in November. quo, according to CME Group’s FedWatch barometer.

“The market is reacting because this rules out the possibility of big rate cuts from the Fed,” says Cameron Dawson, chief investment officer at NewEdge Wealth.

On Wall Street, real estate (-0.63%), sensitive to interest rates, has been neglected. The same movement was observed in Europe where real estate and new technologies fell by 0.86% and 1% respectively.

Several Fed officials, such as Austan Goolsbee and John Williams, have however mentioned further rate cuts in the coming months given the strength of the American economy.

VALUES IN EUROPE

GSK gained 3.22% thanks to a $2.2 billion agreement for litigation in the United States over its drug Zantac, accused of causing cancer.

Deutsche Telekom advances by 1.68%, the group having announced its intention to increase its dividend and buy back shares in a context of anticipation of an increase in its turnover until 2027.

German car manufacturers BMW (-0.73%) and Mercedes (+0.35%) recorded mixed fortunes after announcing a decline in their sales in the third quarter. The German automotive sector had already been heavily sanctioned at the start of the week after the provisional anti-dumping measures decided by China.

TODAY’S INDICATORS

Unemployment claims increased in the United States during the week ending October 5, to 258,000 compared to 225,000 the previous week, according to the Labor Department.

Retail sales in Germany rose much more than expected in August, by 1.6% compared to the previous month, according to the Federal Statistical Office.

CHANGES

The US dollar fell slightly against the yen on Thursday to 148.71 yen (-0.39%) after data showed signs of weakness in the labor market and a stronger than expected rise in prices in the United States in september.

Against a basket of six reference currencies, the dollar index is however up 0.06%, close to a nearly two-month high.

The euro is trading at $1.0922 (-0.14%) and the pound sterling at $1.3055 (-0.11%).

RATE

Bond yields in the euro zone erased their gains from the start of the session to end stable after the publication of American indicators.

The ten-year German Bund yield closed at 2.253% and that of the French OAT of the same maturity at 3.026% while the new Prime Minister Michel Barnier presented a 2025 budget which provides for 60 billion euros in savings and tax increases.

In the United States, the yield on ten-year Treasury bonds increased by around two basis points, to 4.0844%.

OIL

Hurricane Milton which hit Florida and geopolitical risks in the Middle East are supporting oil prices: a barrel of Brent gained 3% to 78.88 dollars and that of American light crude (WTI) rose 2. 99% at $75.42.

(Writing by Claude Chendjou, edited by Kate Entringer)

Copyright © 2024 Thomson Reuters