PARIS (Reuters) – European markets ended lower on Friday, with the exception of the FTSE, as investors digested the latest monetary policy comments.
In Paris, the CAC 40 finished stable at 8,022.41 points, while the German Dax fell 0.53% and the British Footsie nibbled 0.24%.
The EuroStoxx 50 index ended the session down 0.35%, compared to 0.13% for the FTSEurofirst 300 and 0.11% for the Stoxx 600.
The rate outlook in the United States led a week that was poor in indicators.
The Federal Reserve is repositioning itself after three successive inflation indicators having surprised on the rise, and which suggests that price pressures remain high in the United States.
The president of the institution, Jerome Powell, declared on Wednesday that it would take more time to be sufficiently confident in the slowdown of inflation towards 2%.
“There is normally eight months between the last Fed hike and when the central bank starts cutting rates. But during this cycle, the Fed has held interest rates constant for ten months,” notes Torsten Slok, chief economist at Apollo.
“Given that loose financial conditions will continue to support inflation and growth in the coming quarters, the Fed cycle is likely to be very different with rates elevated for longer than we observe usually”.
Geopolitical concerns were added to pressure on rates, as markets worried all week about Israel’s response to Iran’s large-scale attack on Saturday.
The Eurostoxx 50 volatility index, which measures investor nervousness, reached its highest level since last November this week, rebounding to 18.26 points on Friday.
The numerous company results, including those of LVMH and ASML, also livened up discussions this week.
A WALL STREET
Wall Street is hesitant, with markets worried about the Fed’s restrictive posture.
At closing time in Europe, trading on the New York Stock Exchange indicated an increase of 0.48% for the Dow Jones, against a decrease of 0.4% for the Standard & Poor’s 500 and 1.05 % for the Nasdaq Composite.
VALUES
L’Oreal reported on Thursday an increase of 9.4% in its turnover on a comparable basis in the first quarter, and advanced by 5.04%.
Renault lost 2.23% after Nissan Motor, partner of the French group, reduced its annual operating profit forecast by 14.5% on Friday.
Schneider Electric fell 3.23% after announcing discussions with Bentley Systems regarding a potential transaction.
Pluxee on Friday raised its organic sales growth and Ebitda margin targets for 2024 and jumped 5%.
Ipsos reported on Thursday a turnover of 557.5 million euros in the first quarter, against 532 million a year ago, and fell by 7.81%.
Volvo lost 4.14% after its second-largest shareholder, Geely Holding, sold 2.5% of its stake in the group at a 2.5% discount.
RATE
Yields fell slightly in the United States but remained close to their highest levels since November.
At the close of the European interest rate markets, the ten-year Treasury yield fell 3.4 bp to 4.6125%, compared to 1.9 bp for the two-year rate, to 4.9707%.
The German ten-year yield rose 1.1 bps to 2.505%, its highest since November, while the two-year yield rose 2.3 bps to 3.006%.
CHANGES
The dollar is falling against the euro, as investors reassess the trajectory of rates in the euro zone, while risk appetite picks up slightly.
The dollar lost 0.12% against a basket of reference currencies, while the euro strengthened by 0.1% to 1.0654 dollars. The pound sterling fell 0.28% to $1.24.
OIL
Crude is hesitating despite reassuring developments in the Middle East, with markets still worried about a possible impact of geopolitical tensions on crude supply.
Brent is stable at 87.06 dollars per barrel, American light crude (West Texas Intermediate, WTI) rises 0.17% to 82.87 dollars.
(Written by Corentin Chappron, edited by Zhifan Liu)
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