by Diana Mandia

(Reuters) – European scholarships finished in dispersed order Thursday after a volatile session marked by the eighth reduction in interest rates from the European central bank (ECB), which should be followed by a summer break, and hopes of progress in the commercial file after a telephone interview between the Chinese president and his American counterpart.

In Paris, CAC 40 lost 0.18% to 7,790.27 points. In Frankfurt, the Dax took 0.20% and in London, the FTSE 100 won 0.11%.

The Eurostoxx 50 index ended up 0.09%, the FTSEUROFST 300 increased by 0.19%and the Stoxx 600 advanced by 0.17%.

As expected, the ECB lowered its master interest rate on Thursday, also stressing being in good position in the face of global economic uncertainty, a commentary which, associated with the reflux of inflation, makes the money markets confident in the fact that Frankfurt will mark a break in its monetary easing cycle in July.

The operators have thus reduced their anticipations of new rate drops by the end of the year, now tabling on a softening of 25 base points, against around 30 before the start of the press conference of the president of the ECB, Christine Lagarde.

Bond yields, down in the morning, turned upwards after the words of Christine Lagarde, penalizing part of the afternoon the equity markets, which however reduced their losses at the end of the session.

“The rates now located in the middle of their estimated neutral range, the bar for new reductions has been raised. Having already made a softening of 1.75% during this cycle, the ECB can afford to move from urgency to patience,” notes Irene Laure, economist at Schroders.

The comments of Christine Lagarde were eagerly awaited due to the context of great uncertainty as to the impact of customs duties imposed by the American president Donald Trump, and while the break in the massive surcharges announced by the White House in April to allow negotiations will end in July.

Investors continue to remain on the lookout for any sign of progress in negotiations: the telephone interview that Chinese president Xi Jinping and his American counterpart Donald Trump had Thursday was intended to flatten disputes between their two countries on their reciprocal customs rights, according to the China Embassy in the United States, which contributed to optimism.

VALUES

At the values, the Franco-British Satellite Operator Eutestat lost 18.2% after Hanwha Systems sold his participation with a discount.

Elsewhere in Europe, Wizz Air plunged 27.9% after the low -cost airline disappointed expectations for its annual operating profit.

A Wall Street

Wall Street is experiencing a volatile session, pending the monthly report on American employment scheduled for Friday and hopes of progress on the commercial front.

At the time of the fence in Europe, the Dow Jones takes 0.29%, the Standard & Poor’s 500 advances by 0.42%and the Nasdaq Composite gains 0.71%.

The indicators of the day

Industrial orders increased unexpectedly in Germany in April in April, while the economists interviewed by Reuters were tabling on a drop, which notably helped Dax in Frankfurt.

In the United States, unemployment registrations have increased for the second consecutive week, which indicates a weakening of market conditions in an increasingly unfavorable economic climate.

Changes

The euro earns 0.25% to $ 1.1445 after the ECB suggested that it would take a break in its monetary softening cycle. In parallel, the greenback has suffered from American data which reported a weakening of labor market conditions.

“The strength of the euro comes from the surprisingly optimistic message of the ECB, which indicated that it was approaching the end of the reduction cycle with the drop in today’s rates,” said Michael Pfister, analyst at Commerzbank.

“However, we must also keep in mind that we are witnessing a weakness of the dollar at the same time, following rather weak American data, which have strengthened concerns about the consequences of customs duties”.

RATE

The bond yields of the euro zone increased Thursday with the prospects of a break in the monetary softening cycle of the ECB.

The yield of the German Bund at ten years took 6.4 base points at 2,5870%. The two years old, most sensitive to rate expectations, won 8.1 basic points at 1.8740%.

In the United States, the yields of treasury bills are slightly increasing following discussions between the American and Chinese presidents, although the session is volatile and the low data on the job market have dropped them earlier in the day.

OIL

Oil prices are growing after the telephone interview between Xi Jinping and Donald Trump.

The Brent advances 0.99% to 65.50 dollars per barrel and light American crude (West Texas Intermediate, WTI) takes 1.08% at 63.53 dollars.

To be continued on June 6:

(Some data may accuse a slight offset)

(Written by Diana Mandiá, edited by Blandine Hénault)

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