Europe ends in green, inflation in the United States is slowing

Claude Chengju

PARIS (Reuters) – European stocks rose on Wednesday, and Wall Street was also in the “green” mid-session after the release of mixed data on US consumer prices in April, which showed the first slowdown in annual inflation since August last year, but also reflected , which is undoubtedly temporary.

In Paris, CAC 40 ended with a 2.5% increase to 6269.73 points. The British Footsie received 1.44% and the German Dax – 2.17%.

The EuroStoxx 50 index rose by 2.62%, the FTSEurofirst 300 by 1.69% and the Stoxx 600 by 1.74%.

The US Department of Labor said on Wednesday that consumer price inflation in the United States slowed markedly in April due to lower gasoline prices.

The consumer price index (CPI) slowed to 0.3% last month after jumping 1.2% in March, and year on year growth slowed to 8.3% from 8.5% in March.

The publication of these statistics an hour before the opening of Wall Street initially scared investors, as the so-called core inflation, ie excluding energy and food, continued to rise. In April, it accelerated, exceeding the expectations of economists, assuming According to the US Energy Information System (EIA), the slowdown was only temporary, as this week pump prices began to rise again in the United States.

“The data underscores that inflation and rising prices have probably not yet peaked,” said Greg Bassuk, managing director of AXS Investments.

However, money markets now expect US Federal Reserve rates to rise by 77% from 75 basis points against a probability of 81% before the publication of data on inflation in the United States.

In Europe, the president of the European Central Bank (ECB) Christine Lagarde announced on Wednesday that the institution may terminate its asset purchase program (APP) in the early third quarter and raise rates “a few weeks” later, until inflation in the eurozone last month reached 7.5% in a year.

The rise in consumer prices in Germany was also confirmed on Wednesday by 7.8% for the year in April.

In bond markets, the yield on ten-year US Treasury bills rose above 3%, and the yield on the two most sensitive rates to change rates at the close of the European Stock Exchanges was almost 8 basis points to 2.698%.

The yield on ten-year German bonds ended steadily at 1,001%, and its French equivalent of the same maturity remained virtually unchanged at 1.525%.

VALUES IN EUROPE

In addition to health care (-1%), all major compartments of the European Stoxx 600 ended in green, energy (+ 3.2%), basic resources (+ 1.9%) and finance (+ 2.1%), recording one of the strongest achievements.

Oil groups TotalEnergies, Eni and BP took from 2.7% to 4.5%.

Societe Generale, BNP Paribas and Deutsche Bank rose 2.8%, 2.4% and 2.3% respectively, while the banking sector index rose 2.3%.

Alstom’s business results fell 5.1%, and its cash forecast disappointed investors.

On the other hand, Thyssenkrupp grew 11.2% after raising its annual sales and operating profit forecast.

The publications of the Italian luxury group Salvatore Ferragamo (+ 10%) and the catering company Compass (+ 7.3%) were also welcomed, which allowed Elior to rise by 5.5% after that.

Bayer lost 6.2% after the US administration appealed to the Supreme Court not to consider the German group’s appeal in the Roundup dispute.

ON VOL STREET

At the close in Europe, the Dow Jones rose 0.78%, Standard & Poor’s 500 by 0.58%, while the Nasdaq, which reached an 18-month low this week, fell 0.36%.

Rising profitability benefits the financial and banking sectors, but negatively affects technology stocks such as Amazon, Microsoft, Apple, Meta Platforms and Tesla, which fell 0.2% to 0.8%.

In addition to banks, the energy sector (+ 3.35%) supports the Dow Jones and the S&P-500, while investors fear tensions in oil supplies.

In earnings reports, Coinbase Global fell 23% after recording 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 reference currencies, reduced losses after the release of data on inflation in the United States.

“Inflation is much higher than expected, especially for the so-called core indicator, which indicates that core inflationary pressures remain strong and stable,” said Carl Chamotte, 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 Gallo, confirm a likely rise in the euro. European institution this summer.

OIL

Oil prices have recovered after falling by almost 10% in the last two sessions, fueled by fears about the proposal as the European Union seeks to reach a consensus on new sanctions against Russia.

A barrel of Brent took 4.94% to $ 107.54, and American light oil (West Texas Intermediate, WTI) – 5.52% to $ 105.22.

(Report by Claude Shenju, edited by Jean-Michel Belo)