by Diana Mandia

(Reuters) – European stock markets ended higher on Monday, reassured by comments from the European Central Bank’s (ECB) chief economist on easing monetary policy and by the appointment of fund manager Scott Bessent as chairman. post of Secretary of the United States Treasury.

In Paris, the CAC 40 gained 0.03% to 7,257.47 points around 4:56 p.m. GMT. In Frankfurt, the Dax advanced 0.45% and in London, the FTSE 100 gained 0.36%.

The EuroStoxx 50 index ended up 0.29%, the FTSEurofirst 300 rose 0.04% and the Stoxx 600 gained 0.14%.

European stock markets reacted well on Monday to the nomination of Scott Bessent as US Treasury secretary, a long-awaited announcement that eased fears of a riskier choice and even worries about the impact of trade measures of Donald Trump on inflation, the future leader’s views on tariff increases being more moderate than those of the president-elect.

“The market believes that Mr. Bessent is a safe candidate,” said Stephen Spratt, strategist at Société Générale, relieved that the risk of a less orthodox choice was ruled out by the markets and that Scott Bessent raised the possibility of limiting American borrowing.

Eurozone investors were also reassured by comments by European Central Bank (ECB) chief economist Philip Lane in an interview with business daily Les Echos, in which he warned that monetary policy should not remain too strict for too long.

Following less than encouraging purchasing managers’ indices published last Friday, markets are increasingly counting on an acceleration in the ECB’s interest rate cut and are expecting an easing of around 150 basis points by the end of next year.

Volatility – certain indices, including the CAC 40, went into negative territory several times during the session – could however mark the rest of the week before the publication of a series of major indicators, including preliminary data on inflation in Germany on Thursday and in France on Friday.

VALUES

In Paris, Thales and Dassault Aviation fell by 4.2% and 4% respectively after Kepler Cheuvreux lowered the recommendation on the two values ​​to “keep”.

French semiconductor materials supplier Soitec gained 15.7%, finishing at the top of the SBF 120 index and extending its gains for a third consecutive day after first-half results reassured investors.

Atos, for its part, soared by 98.8% after announcing on Monday that it had once again entered into exclusive negotiations with the French State for the sale of certain of its activities, this time covering a smaller scope.

Amundi lost 5.5% while Unicredit’s offer for all the shares of its rival Banco BPM raises doubts about the sustainability of the contract signed until 2027 with the French asset management manager in Italy.

The title of Commerzbank, a group with which Italy’s second largest bank is also pursuing controversial negotiations, fell 5% on the Frankfurt Stock Exchange, while in Milan, UniCredit lost 4.7% and Banco BPM gained 5.4%. %.

The European DIY distributor Kingfisher, which lowered its annual profit forecast on Monday, lost 13.2%.

A WALL STREET

At closing time in Europe, the Dow Jones gained 0.69% and the Standard & Poor’s 500 gained 0.26%, both reaching intraday records. The Nasdaq Composite advances by 0.38%.

Department store operator Macy’s fell 3.5% after delaying the publication of its third quarter results due to an accounting problem.

TODAY’S INDICATORS

The morale of German entrepreneurs fell more than expected in November, showed a survey by the Ifo institute published Monday, which constitutes further bad news for a country which should be the worst performer in the Group of Seven (G7) this year.

The business climate index stood at 85.7 in November after 86.5 in October, a figure that Franziska Palmas, senior Europe economist at Capital Economics, said “confirms that the German economy remains in the doldrums.”

RATE

Government bond yields fell on Monday in the euro zone as yields fell in the United States after President-elect Donald Trump announced his choice of Scott Bessent as US Treasury secretary, triggering a rally in US Treasury bonds.

The ten-year German Bund yield lost around 5 basis points to 2.2050%.

Across the Atlantic, the yield on ten-year Treasuries lost 10 basis points to 4.3023%. The two-year fell by 6 basis points to 4.3091%.

Lower oil prices have also weighed on yields, which are sensitive to expectations about inflation and central bank rates, in turn heavily influenced by energy prices.

CHANGES

On the foreign exchange market, the dollar is falling after its recent increases, the choice of the US Treasury Secretary appearing to reassure the bond market on budgetary discipline, which lowers yields and reduces the advantage of the greenback.

The dollar lost 0.39% against a basket of reference currencies.

The euro, which was affected on Friday by the weakness of the continent’s manufacturing PMI indices, took the opportunity to advance by 0.48% to 1.0467 dollars.

OIL

Oil prices fall after US media Axios reported on Monday that the State of Israel and Lebanon had agreed to the terms of a ceasefire to end the conflict between Israel and Hezbollah . Israel’s security council will meet on Tuesday to approve a deal on a ceasefire in Lebanon, an Israeli official told Reuters on Monday.

Brent lost 2.51% to $73.28 per barrel and American light crude (West Texas Intermediate, WTI) lost 2.81% to $69.25.

This drop in prices comes as the risk of supply disruptions from Iran or Russia caused crude prices to rise last week.

TO BE CONTINUED ON NOVEMBER 26:

The European Commission must deliver its opinion on Tuesday on the 2025 budgets of member states.

(Some data may have a slight lag)

(Written by Diana Mandiá, edited by Augustin Turpin)

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