by Marc Angrand
(Reuters) – The main European stock markets, except London, ended lower on Friday after the eagerly awaited publication of monthly employment figures in the United States, which in the eyes of many investors confirm the scenario of a rise in prices. Federal Reserve rate as of March.
In Paris, the CAC 40 lost 0.42% (30.18 points) to 7,219.48 and in Frankfurt, the Dax lost 0.65% while in London, the FTSE 100 gained 0.37% thanks to on the rise in mining values.
The EuroStoxx 50 index fell by 0.44%, the FTSEurofirst 300 by 0.35% and the Stoxx 600 by 0.39%.
At the time of the close in Europe, red was also prevailing on Wall Street: the Dow Jones was stable but the Standard & Poor’s 500 dropped 0.33% and the Nasdaq Composite 0.75%.
The US economy created 199,000 jobs last month when the consensus expected 400,000, but the unemployment rate fell to 3.9%, a level considered by some to correspond to full employment, and hourly wages increased by 0 , 6% over one month.
These last two figures could provide additional arguments for the Fed to advance the tightening of its monetary policy: the futures contracts on the rates of the federal funds, reflecting the expectations of the investors in the matter, now reflect a probability of 90% of an increase in the “fed funds” rate in March.
“These are the kinds of figures that will make the market think that the Fed will make four rate hikes in 2022,” said Steven Ricchiuto, chief economist for the United States at Mizuho Securities in New York. “The hourly wage figure will give the ‘hawks’ arguments to push the Fed to step up.”
In the euro zone, the most anticipated figure of the day is also a reflection of inflationary pressures: the rise in prices in the 19 countries having adopted the single currency reached 5% in December in first estimate, its highest historical level.
Over the week as a whole, the Stoxx 600 posted a loss of 0.32% but the CAC 40 rose by 0.93%.
RATE
The employment figures in the United States and those of inflation in the euro zone encouraged the further rise in bond yields: that of the ten-year German Bund ended at -0.032%, just below the highest The high since May 2019 reached the previous day (-0.031%), and that of US Treasuries of the same maturity took more than six basis points at the time of the European close at 1.7975%.
The two-year and five-year American have reached their highest level since March and January 2020 respectively.
The ten-year-old German took a total of more than 13 points for the week, its biggest weekly gain since June 2020.
VALUES
In Europe, the most marked sector decline of the day is for real estate stocks, whose Stoxx index fell 1.65%. The transport and leisure compartment lost 1.6%, continuing the decline started Thursday after a gain of 4.6% in three sessions.
On the rise, the commodity stoxx rose 1.89% and that of banks, sensitive to rate expectations, rose 1.04%.
In Paris, STMicroelectronics gained 3.22% after a quarterly turnover above expectations and in Frankfurt, Deutsche Bank gained 1.78% in reaction to statements by its CFO to the daily Handelsblatt on the group’s ability to achieve its main objective of profitability.
CHANGES
The dollar is losing ground against other major currencies (-0.49%) after the US employment report, traders primarily retaining the disappointment of job creation.
The euro took the opportunity to rise to 1.1346 dollars (+ 0.49%) while the inflation statistics in the euro zone had only briefly benefited him.
On the cryptocurrency side, bitcoin fell 2.65% under $ 42,000, the lowest since September.
OIL
The oil market is losing ground but remains on track to record its best weekly performance since mid-December thanks to the impact of tensions in Kazakhstan and the drop in Libyan production due to maintenance work.
Brent is almost stable at 81.95 dollars a barrel but American light crude (West Texas Intermediate, WTI) lost 0.38% to 79.16 dollars.
They still post gains of 5.3% and 5.2% respectively over the week.
(Written by Marc Angrand)