The Fed doubts that Europe is ending up in disorder
By Claude Chenjou
PARIS (Reuters) – European stock markets ended mixed on Wednesday as Wall Street fell late in the morning in New York, with investors torn between signs that U.S. inflationary pressures were easing and statements from the U.S. Federal Reserve. Reserve officials favor further interest rate hikes.
In Paris, the CAC 40 ended with an increase of 0.09% to 7,083.39 points. The British Footsie fell by -0.26%, and the German Dax fell by 0.03%.
The EuroStoxx 50 index ended unchanged, while the FTSEurofirst 300 gained 0.25%. The Stoxx 600 advanced 0.23%, its sixth straight session in the green.
Stock markets in Europe eased in the morning, benefiting from the prospect of a less severe recession than feared in Germany and news that the European Central Bank (ECB) may raise interest rates by just a quarter of a point in March. Gains as Wall Street sinks deeper into the red.
US Federal Reserve (FED) officials should raise interest rates above 5% “as soon as possible” before a possible pause, St. Louis branch president James Bullard said on Wednesday.
His counterpart at the Cleveland Fed went a step further, saying the US central bank should raise interest rates “slightly” above the 5.00%-5.25% range to curb inflation.
The announcements came ahead of U.S. producer prices and retail sales figures, which showed a sharper-than-expected decline, and for a time revived hopes of a lull in interest rate hikes.
In Europe, the growth was driven by the basic resources division (+2.44%) and the high technologies division (+1.25%), especially ASM International (+9.78%).
In Paris, luxury stocks were sought after the results of Richemont (+0.66%) and Burberry (+3.30%). Burberry’s chief financial officer, Julie Brown, also said this month that she saw encouraging signs in China. Hermès advanced by 0.24% and LVMH by 0.56%.
Eramet, which is close to a deal with BASF, bought 2.73% as part of a €2.4 billion investment in Indonesia.
On the downside, Renault lost 1.96%, with the manufacturer reporting a 5.9% drop in global sales in 2022 on Wednesday.
In Frankfurt, Continental (-2.99%), the auto supplier posted a 2022 profit margin below the forecast range on the Dax.
ON WALL STREET
At the close in Europe, the Dow Jones was down 1.11%, the Standard & Poor’s 500 was down 0.81% and the Nasdaq was down 0.59%.
In addition to interest rate concerns weighing on the tech division (-0.68%), especially Tesla, which fell 1.003%, financial publications are also driving the trend.
Although United Airlines announced that it has quadrupled its profit forecast this year, it fell 1.67%.
In the foreign exchange market, the dollar fell 0.27% against a basket of international currencies, as a sharp decline in retail sales indicated a worsening US economy.
The unexpected decision by the Bank of Japan (BoJ) to continue ultra-accommodative policy affects the yen, which fell 0.38% to 128.62 against the dollar.
The euro rose 0.19% to trade at $1.0808.
European bond yields continued to decline, returning to levels seen in December before the last ECB meeting: the German top ten lost eight basis points to 2.00%.
In the USA, the yield of American Treasuries decreased by 10.5 points to 3.42%.
Oil prices are supported by China, with the International Energy Agency (IEA) saying the end of China’s “zero COVID” policy will boost global oil demand this year.
A barrel of Brent oil increased by 1.15% to $86.91, while a barrel of American light oil (West Texas Intermediate, WTI) increased by 1.38% to $81.29.
TO FOLLOW ON THURSDAY:
(Some data may show slight variation)
INSIDE THE FENCE
Indexes Last Available. There is. %YTD
Eurofirst 300 1,805.87 +4.45 +0.25% +7.59%
Eurostoxx 50 4174.34 +0.01 +0.00% +10.04%
CAC 40 7083.39 +6.23 +0.09% +9.42%
Dax 30 15,181.80 -5.27 -0.03% +9.04%
FTSE 7830.70 -20.33 -0.26% +5.09%
SMI 11366.62 -35.37 -0.31% +5.94%
Values to watch in and around Paris
Indexes Last Available. There is. %YTD
Dow Jones 33530.21 -380.64 -1.12% +1.16%
S&P 500 3958.26 -32.71 -0.82% +3.09%
Nasdaq 11028.46 -66.65 -0.60% +5.37%
Nasdaq 100 11482.12 -75.07 -0.65% +4.96%
Minutes of the meeting on the wall
“The Day Ahead” – Update on the next session
on Wall Street [DAY/US]
Has Expectation Rate.% YTD
Euro/Dlr 1.0808 1.0788 +0.19% +0.99%
DLR/Yen 128.61 128.13 +0.37% -1.89%
EUR/JPY 139.05 138.22 +0.60% -0.90%
Dlr/CHF 0.9152 0.9219 -0.73% -0.98%
EUR/CHF 0.9892 0.9946 -0.54% -0.03%
Stg/Dlr 1.2357 1.2288 +0.56% +2.15%
Index $ 102.1080 102.3900 -0.28% +6.17%
There is. %YTD
Gold Spot 1906.15 1908.39 -0.12% +25.65%
There is an end. Spread/close
Bunds futures 139.98 +0.72
10-year Bunds 2.02 +0.02
Bund 2 years 2.46 +0.01
10-year OATs 2.45 +0.02 +43.00
10-year Treasury 3.43 -0.10
Treasury 2 years 4.12 -0.07
Previous Price Change Change % YTD
US light crude 81.30 80.18 +1.12 +1.40% +32.82%
Brent 86.91 85.92 +0.99 +1.15% +31.62%
(Writing by Claude Chendjou, Editing by Camille Raynaud)