by Laetitia Volga
PARIS (Reuters) – European stock markets ended lower on Friday and bond yields rose following the announcement of solid employment growth in the United States, which confirms the scenario of a next sharp rise in prices. Federal Reserve rate.
In Paris, the CAC 40 ended down 1.17% at 5,866.94 points. The British Footsie fell 0.09%, its decline being limited by the rise in energy stocks with the rise in oil prices. The German Dax lost 1.59%.
The EuroStoxx 50 index fell 1.69%, the FTSEurofirst 300 fell 1.13% and the Stoxx 600 fell 1.18%.
At the time of the close in Europe, Wall Street was also evolving in the red, the Dow Jones losing 1.6%, the S&P-500 2.16% and the Nasdaq Composite 3.08%.
This decline in equity markets is explained by the announcement of 263,000 job creations in September in the United States, a figure higher than expected, and a decline in the unemployment rate to 3.5% while the Reuters consensus gave it at 3.7%.
These figures are “not at all capable of changing the ‘hawkish’ plans of the American Federal Reserve. The latter should therefore continue to raise its key interest rates in the coming months before we can speak of ‘interest rates pivot'”, said John Plassard at Mirabaud.
The FedWatch Barometer shows the likelihood of a three-quarter point Fed rate hike next month is now 89.8% from 85% before the jobs report was released.
The next big event for investors on this front will be Thursday’s release of the US consumer price index, which will allow central bankers to assess progress in tackling inflation ahead of the November meeting.
The first results of the companies are also expected for next weekend with the major American banks.
VALUES
Already in bad shape with disappointing announcements from AMD and Samsung, the European technology sector widened its losses after the US employment data, which offered additional arguments for the Fed to continue raising rates.
The Stoxx high-tech index fell 4.34%. Dassault Systèmes (-6.53%), STMicroelectronics (-5.30%) and Capgemini (-4.07%) are last in the CAC 40. Infineon, ASML dropped 3.65% and 6.14% respectively.
Supported by Oddo’s move to “outperformance”, Renault shares rose 4.91%, leading the Stoxx 600.
Credit Suisse gained 5.36% as the Swiss bank announced it was buying up to three billion Swiss francs worth of debt securities in an attempt to reassure investors.
RATES/EXCHANGES
In the bond market, the yield on ten-year US Treasury bills peaked at 3.91%, its highest level in more than a week, after the US jobs report.
In Europe, the German ten-year exceeded 2.2% and the French peaked at 2.825%.
The dollar appreciated by 0.11% against a benchmark basket of six currencies and stabilized against the euro after a one-week high.
New York Fed President John Williams said the US central bank still had work to do to bring down inflation and sustainably rebalance economic activity, warning that unemployment was most likely to rise in the process. .
THE INDICATORS OF THE DAY
German industrial production fell in August by 0.8% due to the persistence of bottlenecks linked to the COVID-19 pandemic and the war in Ukraine.
OIL
The oil market is heading for a second straight week of gains, buoyed by the decision by OPEC+ countries to cut production by two million barrels a day in November – the biggest cut since 2020 – despite fears of recession and rising interest rates.
Brent gained 3.75% to 97.96 dollars a barrel and US light crude (West Texas Intermediate, WTI) 4.35% to 92.3 dollars.
(Written by Laetitia Volga, edited by Nicolas Delame)
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