by Diana Mandia
(Reuters) – European stock markets ended sharply higher on Monday, marking a rebound after falling in the wake of Donald Trump’s victory in the US presidential election, and before the publication of inflation data in Germany and the United States later this week.
In Paris, the CAC 40 gained 1.20% to 7,426.88 points. In Frankfurt, the Dax gained 1.22% and in London, the FTSE 100 increased by 0.65%.
The EuroStoxx 50 index ended with a gain of 1.02%, the FTSEurofirst 300 gained 1.11% and the Stoxx 600 gained 1.12%.
European markets recovered on Monday in the absence of a major catalyst, November 11 being a public holiday in several countries and after having suffered last week from the upcoming return of former Republican President Donald Trump to the White House and in particular his threats to increase customs duties.
While investors continue to follow developments in U.S. policy, their attention is now on macroeconomic data to be released in the coming days, including October inflation figures for Germany on Tuesday and the United States -United on Wednesday, in order to get an idea of the probability of further rate cuts on both sides of the Atlantic.
The political instability in Germany following last week’s breakup of Chancellor Olaf Scholz’s coalition government could also prove problematic in the months to come, especially if Donald Trump begins to introduce tariff measures targeting Europe , which could raise new doubts about the bloc’s economic growth and prompt the European Central Bank (ECB) to accelerate rate cuts.
Pending further developments, operators are now almost certain that the ECB will reduce the cost of borrowing by a quarter of a point in December.
In the United States, October inflation data will also be closely watched, in a context that calls for caution regarding future price developments, with the measures promised by candidate Trump being considered likely to hinder the central bank’s fight against inflation.
Indeed, TD interest rate strategists believe that the new administration, combined with stronger US economic data, will likely lead the Fed to pause its rate cuts from January to June, after a likely reduction by 25 basis points in December.
VALUES
In terms of values, the automotive supplier Continental gained 10.6% after reporting on Monday a quarterly operating profit higher than expectations.
The shares of companies in the defense sector, for their part, continued to benefit from bets on the fact that Europe will increase its security spending after the election of Donald Trump, with the Swedish group SAAB, the Italian Leonardo and the British Rolls-Royce growing between 3.7% and 4.3%.
Reinsurance company Swiss Re gained 3.5% after UBS raised its recommendation on the value from “sell” to “buy”.
In London, the action of the luxury group Burberry turned downward to end with a loss of 3.3% after Reuters reported that its Italian competitor Moncler (-1.1%) was not in talks to buy it back, according to four sources familiar with the matter. The British weekly newspaper The Mail on Sunday had published the day before that an offer from Moncler was imminent.
A WALL STREET
At closing time in Europe, the Dow Jones gained 0.81%, the Standard & Poor’s 500 0.25% and the Nasdaq Composite 0.02%, thus continuing its rally since Donald Trump’s victory in the US presidential election last week.
The electric car manufacturer Tesla is growing by more than 8%, still boosted by the Republican’s upcoming return to the White House.
CHANGES
The dollar rose on Monday and remained close to the four-month high reached last week after Donald Trump’s victory, while the euro still suffers from the possibility of the introduction of American customs duties which could harm the economy of the euro zone.
The dollar gained 0.50% against a basket of reference currencies and the euro gained/lost 0.62% to 1.0652 dollars.
Bitcoin hit new records on Monday and was trading at $84.407 at closing time in Europe, driven by expectations of a boom in cryptocurrencies in a favorable regulatory environment following the election of Donald Trump as president. American.
RATE
Euro zone bond yields fell on Monday as investors digested the impact of Donald Trump’s second term in the United States and the risks linked to the collapse of Germany’s ruling coalition.
The yield on the ten-year German Bund fell 4.3 basis points to 2.3230%, while that of its two-year counterpart lost 5.7 basis points to 2.1310%.
In the United States, the interest rate markets are closed on Monday on the occasion of “Veteran Day”.
OIL
Crude prices are falling, as the recovery plan announced Friday by China, the second largest oil consumer country in the world, has disappointed investors’ expectations regarding a recovery in demand.
The strengthening of the greenback also makes crude oil more expensive for holders of other currencies and also weighs on prices.
Brent lost 2.73% to $71.85 per barrel and American light crude (West Texas Intermediate, WTI) lost 3.08% to $68.21.
TO BE FOLLOWED ON NOVEMBER 12:
(Some data may have a slight lag)
(Written by Diana Mandiá)
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I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
