by Claude Chendjou

PARIS (Reuters) – The European scholarships ended up on Monday and Wall Street was also in the green in mid -session, calm having returned to the markets after the sharp drop in Friday linked to the American employment report and the announcement of new American customs rights.

In the absence of important financial publications of major macroeconomic companies and indicators, investors have benefited from cheap purchase in several compartments, notably financial and technological.

In Paris, the CAC 40 finished on a gain of 1.14% at 7,632.01 points after a fall in 2.91% on Friday. The British Footsie advanced 0.65% and the German Dax increased by 1.41%.

The Eurostoxx 50 index won 1.47%, the FTSEURofirst 300 0.82%and the Stoxx 600 0.84%.

At the time of the fence in Europe, the Dow Jones rises by 0.99%, the Standard & Poor’s 500 of 1.12%and the Nasdaq by 1.51%, erasing part of the losses suffered on Friday when the S&P 500 fell to a hollow of more than two months.

The American stock market indices corrected Friday after a job report which showed that the economy had created fewer positions than scheduled in July, while the June figures were strongly revised.

This statistic raised fears of a deterioration of the labor market in the United States and at the same time reinforced at almost 90% the probability of a drop in rates of the American Federal Reserve (Fed) in September, against a probability of 63.1% a week ago.

By the end of the year, the markets are now expecting at least two levels of a quarter-point rate in the United States, a prospect that has helped stabilize Wall Street. The Volatility CBOE index fell to around 18 points on Monday after reaching a summit of more than a month on Friday, while short-term bond yields in the United States and Europe stabilized.

The rebound in shares could however be short-lived, fears about customs duties, which will begin to be collected Thursday, being still present, as evidenced by the drop on Monday, against the trend, of the reference index (-0.15%) at the Zurich Stock Exchange. Donald Trump has decided to impose customs duties of 39%on Switzerland, one of the highest rates.

In addition, orders for industry in the United States were strongly contracted in June against the backdrop of ordering of commercial aircraft, according to data published on Monday which confirm Friday’s ISM survey showing an unexpected drop in American manufacturing activity in July.

In the euro zone, the trade agreement between the European Union and the United States weighed the morale of investors in August, according to the Fenix index, which went negative in August, from 4.5 to -3.7.

Values in Europe

Air France-KLM jumped 14.02% thanks to a recovery of Barclays recommendation, the intermediary citing in particular an increase in unit revenues by passengers.

Swiss industrialists like Swatch (-2.35%), Richemont (-1.54%) and Roche (-1.05%) ended up in red after the announcement of American customs duties against Switzerland.

The Lloyds banking values (+9.0%), Close Brothers (+23.52%), Barclays (+1.62%), Bank of Ireland (+3.67%) and Santander (+3.86%) benefited from the cancellation by the Supreme Court of the United Kingdom of a 2024 decision which had caused a shock wave in the banks.

PostNL climbed 4.84% after the group’s announcement of an operating profit for the second quarter while analysts were tabling on a loss.

Changes

The dollar, which lost 1.3% on Friday against a basket of international currencies, further fell 0.34% on Monday. The greenback is weakened by the American employment report and Donald Trump’s decision to dismiss the head of statistics of the Labor Department, Erika Mcentarfer.

The euro yields 0.12%, to 1.570 dollars, after having taken approximately 1.5% on Friday.

RATE

The yields of American sovereign bonds at two years old, which dropped 24 base points (PB) on Friday, stabilized on Monday at 3.71%. The ten years, fell on Friday at one month after a drop of 14 points, was displayed on Monday at 4.21%, also stable.

The yield of the German Bund at ten years ended with a withdrawal of 4.7 base points, to 2.62%, extending the drop on Friday, while the American indicators suggest a more marked monetary easing in the euro zone than in the United States. The two -year -old German gave 1.4 base points to 1.89%.

The yield gap between US and German state obligations to ten years increased by 3.5 base points, reaching 158 bp.

OIL

OPEC +’s decision to make a new increase in production in September weighs on oil prices, but the decline is limited by the threat of American sanctions against Russia.

The Brent refused 0.83% to 69.11 dollars per barrel and the American light crude (West Texas Intermediate, WTI) abandons 0.91% to 66.71 dollars.

To be continued Tuesday:

(Written by Claude Chendjou, edited by Blandine Hénault)

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