By Corentin Chappron
Paris (Reuters) – After three tumultuous sessions, European scholarships managed to bounce back on Tuesday, the latest developments on the commercial front, hoping for a softening of customs measures announced last week by the United States.
In Paris, the CAC 40 increased by 2.5% to 7,100.42 points after losing 9.9% in the last three sessions, while the German Dax rose by 2.36% and the British Footsie has strengthened by 2.71%.
The Eurostoxx 50 index finished the session on an increase of 2.4%, while the FTSEUROFirst 300 scored a gain of 2.61%and that the Stoxx 600 took 2.67%.
The United States representative for foreign trade, Jamieson Greer, reported on Tuesday American efforts to quickly negotiate with trade partners wishing to lower their commercial barriers, while Donald Trump said to expect a Beijing call, suggesting that the American president would be open to negotiations with China.
These statements have contributed to reassuring markets after three sessions marked by exceptional volatility, linked to the risks of trade war and its impacts on global growth.
“In the United States, (customs duties will cause) a more frontal inflationary shock and a slowdown in growth to a reference level close to the recession, the Fed refraining from reducing its rates until December,” said nomura economists who do not exclude a recession across the Atlantic.
“On the other hand, in Europe and Asia, the negative growth shock prevails over the inflation shock, which allows larger monetary and budgetary recovery measures,” added Nomura.
The fact remains that the nervousness of investors remains important, the feeling of market remaining dependent on the numerous and unexpected declarations of the American president, especially as no indicator or monetary policy is expected in the short term.
The risk of a new volatility rebound is therefore important.
VALUES
Remy Cointreau advanced by 5.27%, the European Commission having excluded Bourbon from the list of American products to which it intends to impose customs duties of 25% from May 16, while Donald Trump threatened to impose 200% customs duties on European wines and spirits if bourbon should be included in the European Union countermeasures.
Glencore took 3.7%, the copper prices remaining high despite a possible customs lull.
The defense sector has erased part of its losses from the latest sessions and increased by 4.7%.
Lonza jumped 7.8%, the management of the pharmaceutical company having told analysts that the group was well protected from the consequences of American customs duties.
Eni plans to sell assets following a recent agreement with the Vitol energy merchant, and fell 1.28%.
Vallourec climbed 2.5% after winning a contract with Sonatrach.
A Wall Street
Wall Street appears to be in mid-selection, relieved by the latest developments on the customs duties front.
At the time of the closing in Europe, exchanges at the New York Stock Exchange indicated an increase of 2.45% for the Dow Jones, against 2.42% for the Standard & Poor’s 500, and 2.64% for the Nasdaq Composite.
Changes
The book is progressing against the dollar, the Cambists hoping that London and Washington will succeed in negotiating the economic partnership promised Monday by Prime Minister Keir Starmer.
The dollar earns 0.02% against a basket of reference currencies, the euro rises from 0.12% to 1.0917 dollars, and the pound sterling is strengthened from 0.42% to 1.2771 dollar.
RATE
Bond yields bounce back with the return of appetite for the risk on both sides of the Atlantic.
The yield of ten years German took 3.5 pb to 2.633%, that of the two -year rate gained 6.4 pb to 1.8734%.
Treasury’s yield at ten years takes 4.7 bp to 4.2044%, while the two -year title yield increased from 6 pb to 3.7979%.
OIL
Oil is retreating, the markets worrying about the repercussions of trade tensions between China and the United States.
Brent fell 0.42% to 63.94 Dollars per barrel, the American light crude (West Texas Intermediate, WTI) weakens 0.31% to 60.51 dollars.
(Written by Corentin Chappron, edited by Blandine Hénault)
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