by Claude Chendjou

PARIS (Reuters) – European scholarships finished in dispersed order on Wednesday a session marked by the continuation of the lift of bond yields against the background of fear of a budgetary dead end in the United States.

In Paris, the CAC 40 ended with a loss of 0.40% to 7,910.49 points. The British Footsie nibbled 0.06% and the German DAX grabbed 0.34%, thanks to the technological sector.

The Eurostoxx 50 index lost 0.01%, the FTSEURofirst 300 0.05%and the Stoxx 600 0.04%.

At the time of the fence in Europe, the Dow Jones fell 0.73%, the Standard & Poor’s 500 declines by 0.12%, while the Nasdaq advances by 0.41%. Most S&P sectors are in red, while Target, which loses 3.52%, weighs on distribution.

The appetite for the risk to Wall Street is limited while the Republican elected officials of the House of Representatives are struggling to agree on the vast bill of tax cuts and budgetary reductions wanted by President Donald Trump.

The quest for a compromise on this text is vital while the American public debt already amounts to 36,200 billion dollars and could still increase from 2,000 to 5,000 billion, according to independent analysts. Friday, the rating agency Moody’s degraded the sovereign American note, causing tensions in the bond compartment, which still hands itself on Wednesday before an award of $ 16 billion in US Treasury bonds at 20 years.

The increase in long -term yields are due to a “combination of concerns about inflation and budgetary problems”, underlines Stephen Gola, a rate specialist at Stonex Group.

In Europe, where bond yields have also progressed, putting pressure on stocks, the trend has been negative for a long time before the London and Frankfurt scholarships managed to get their faces at the end of the session.

The drop in Europe was mainly fed by the distribution compartment (-0.86%) in reaction to unfavorable results published by companies in the sector.

Values ​​in Europe

JD Sports (-10.60%) ended up the peloton of the stoxx 600 after having a drop in sales in the first quarter and warned on the request on the background of customs duties.

Marks & Spencer advanced by 1.93%, the title having returned after opening down following the announcement of a cyberattack which could cost the group around 300 million pounds (355 million euros).

Julius Baer, ​​assigned by a net charge of 130 million Swiss francs (139 million euros) resulting from a credit portfolio exam and the replacement of its risk director, sold 4.85%.

The German manufacturer of chips Infineon won 2.26% after the announcement of a collaboration with NVIDIA to develop chips for new energy distribution systems in data centers intended for artificial intelligence.

The indicators of the day

The German Council of Economic Experts revised its forecast for gross domestic product (GDP) for Germany on Wednesday, now expecting stagnation in 2025.

British inflation accelerated more than expected in April, 3.5% over a year, show data from the National Statistical Office (ONS).

RATE

The yield of American treasury bills at ten years climbed 5.6 base points, to 4.5366%, investors continuing to monitor the evolution of a budget bill at the US Congress.

Long -term American yields have been going up continuously since the beginning of the month with Donald Trump’s economic policy that could affect the appeal for American assets.

Sovereign yields in the euro zone increased on Wednesday under the effect of the rise in oil prices and concerns about the budgetary situation of several countries.

The yield of the German Bund at ten years took almost four base points, at 2.64%, while the markets now expect the European Central Bank (ECB) to reduce its main key rate to 1.74% by the end of the year, against a forecast of 1.5% last month.

Yields in Japan also affected new heights on Wednesday, placing the Bank of Japan (BOJ) in a dilemma as it tries to reduce its debt purchases and normalize its monetary policy.

Changes

The dollar fell for the third consecutive session, by 0.62%, faced with a basket of reference currencies, Donald Trump’s budgetary project aroused concerns.

The euro advances by 0.51%, to 1.338 dollars, while the pound sterling is exchanged at 1.3443 dollars (+0.37%) after having touched its highest level since February 2022, in reaction to figures for British inflation.

OIL

Oil prices retreat, penalized, among other things by the surprise increase in American stocks in crude, petrol and distillates during the week ended on May 16, according to the latest data from the Energy Information Administration.

The Brent refused 0.32% to 65.18 dollars per barrel and the American light crude (West Texas Intermediate, WTI) from 0.32% to 61.83 dollars.

(Written by Claude Chendjou, edited by Kate Entringer)

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