#Europe #ends #green #inflation #slows
EUROPE ENDS IN GREEN, INFLATION IN THE UNITED STATES DECREASES
by Claude Chendjou
PARIS (Reuters) – European stocks closed higher on Wednesday and Wall Street was also in the green mid-session after the release of mixed U.S. consumer price data for April that showed the first slowdown since August. spent on inflation at an annual rate a respite that is undoubtedly temporary.
In Paris, the CAC 40 finished with a gain of 2.5% at 6,269.73 points. The British Footsie took 1.44% and the German Dax 2.17%.
The EuroStoxx 50 index advanced 2.62%, the FTSEurofirst 300 1.69% and the Stoxx 600 1.74%.
The US Department of Labor said on Wednesday that US consumer price inflation slowed markedly in April due to lower gasoline prices.
The consumption price index (CPI) decreased to 0.3% last month after a bond of 1.2% in March and after a slowdown at 8.3% compared to 8.5% in March.
The publication of this statistic, an hour before the opening of Wall Street, initially scared investors because the so-called core inflation, that is, without energy and food products, continued to accelerate in April, above economists’ expectations, suggesting that the price slowdown was only temporary as pump prices started rising again this week in the United States, according to data from the US Energy Information System (EIA).
“The data underscores that inflation and price growth have probably not peaked yet,” said Greg Bassuk, managing director of AXS Investments.
However, money markets are now expecting 77% of a 75 basis point hike in US Federal Reserve rates vs. an 81% chance before the release of US inflation figures. .
In Europe, Christine Lagarde, president of the European Central Bank (ECB), announced on Wednesday that the institution could end its asset purchase program (APP) at the beginning of the third quarter and raise its rates “a few weeks” later, while inflation in the euro zone last month reached 7.5% in one year.
The rise in consumer prices in Germany was also confirmed on Wednesday at 7.8% year over year in April.
In the bond markets, the return on ten-year US Treasury bills exceeded 3% and the two-year one, the most sensitive to rate changes, took almost 8 basis points to 2.698% at the close of the Stock Exchanges European.
The 10-year German Bund yield ended flat at 1.001% and its French equivalent of the same maturity virtually unchanged at 1.525%.
VALUES IN EUROPE
Apart from healthcare (-1%), all the main compartments of the pan-European Stoxx 600 finished in the green, energy (+3.2%), basic resources (+1.9%) and financials (+2.1%) having recorded one of the strongest gains.
The oil groups TotalEnergies, Eni and BP went from 2.7% to 4.5%.
In banks, Societe Generale, BNP Paribas and Deutsche Bank advanced 2.8%, 2.4% and 2.3% respectively, while the banking sector index gained 2.3%.
Trading results aside, Alstom fell 5.1%, its outlook on its cash has disappointed investors.
Thyssenkrupp, on the other hand, soared 11.2% after raising its full-year outlook for sales and operating profit.
The publications of the Italian luxury group Salvatore Ferragamo (+10%) and the collective catering company Compass (+7.3%) were also well received, which allowed Elior to advance 5.5% in its wake.
Bayer lost 6.2% after the US administration asked the Supreme Court not to follow up on the German group’s appeal in the Roundup disputes.
ON WALL STREET
At the close in Europe, the Dow Jones advanced 0.78%, the Standard & Poor’s 500 0.58%, while the Nasdaq, which hit 18-month lows this week, fell 0.36%.
The rise in yields benefits the financial and banking sector, but penalizes technology stocks such as Amazon, Microsoft, Apple, Meta Platforms and Tesla, which fell 0.2% to 0.8%.
In addition to the banks, the energy compartment (+3.35%) supports the Dow Jones and the S&P-500 while investors fear tensions over the supply of crude oil.
In earnings releases, Coinbase Global plunged 23% after posting a net loss in the first quarter amid a stock market crash.
CHANGES
The dollar, initially at a four-day low against a basket of benchmark currencies, trimmed losses after the release of US inflation figures.
“Inflation is much higher than expected, especially in the so-called core measure, suggesting underlying inflation pressures remain strong and persistent enough,” said Karl Schamotta, market strategist at Cambridge Global Payments.
The euro, up 0.23%, is trading at $1.0550, as several ECB members, including Banque de France Governor Francois Villeroy de Galhau, confirmed a possible rate hike by the European institution this summer.
PETROLEUM
Oil prices are recovering after falling almost 10% in the last two sessions, fueled by fears over supply as the European Union tries to reach a consensus on new sanctions against Russia.
The barrel of Brent took 4.94% to 107.54 dollars and that of light American crude (West Texas Intermediate, WTI) 5.52% to 105.22 dollars.
(Report Claude Chendjou, edited by Jean-Michel Bélot)