Market: Good start to the month on equities

by Laetitia Volga

PARIS (Reuters) – European stock markets ended higher on Thursday, benefiting from an easing of fears over the American debt, the Chinese economy and speculation on a status quo by the Federal Reserve at its next meeting.

In Paris, the CAC 40 gained 0.55% to 7,137.43 points. The British Footsie took 0.59% and the German Dax 1.21%.

The EuroStoxx 50 index advanced 0.94%, the FTSEurofirst 300 0.76% and the Stoxx 600 0.78%.

At the time of the closing in Europe, Wall Street was also moving up: the Dow Jones took 0.2% while the Standard & Poor’s 5000.6% and the Nasdaq Composite 0.8%.

After ending June in the red, global markets are entering June with more enthusiasm thanks to positive progress on the US debt ceiling file, good statistics from China and the hope of a break in the Fed in raising its rates.

The labor market, however, still shows signs of strength: the US private sector created 278,000 jobs last month according to the ADP survey, while the Reuters consensus gave a figure of only 170,000.

Investors will watch with interest Friday’s release of the Labor Department’s monthly report. The Reuters consensus expects non-farm payrolls to fall to 190,000 from 253,000 in April.

“Labour market conditions are still tight,” said Nancy Vanden Houten, chief economist at Oxford Economics. “While we expect the Fed to leave rates unchanged at its next meeting, a more sustained easing in labor market conditions is needed for further hikes to be permanently ruled out.”


On the stock market in Europe, Remy Cointreau lost 5.01%, the spirits group having maintained its 2023-2024 outlook despite a stronger than expected increase in operating profit over the previous financial year.

Casino fell 9.43% while the CEO of the distribution group was heard by the financial brigade as part of an investigation for price manipulation and insider trading in particular.


Eurozone government bond yields ended lower for the fourth consecutive session, in reaction to the slowdown in inflation seen in several eurozone countries.

The ten-year German was trading around 2.25% at the end of the day.

In the United States, the decline in yields intensified after the announcement of a decline in labor productivity over January-March and a sharp downward revision in unit labor costs over the last two quarters. The yield on ten-year government bonds fell three basis points to 3.6045%.


Mirroring yields, the dollar fell 0.68% against a basket of benchmark currencies as investors lowered their expectations of a US rate hike this month.

According to the FedWatch tool, markets are now pricing in around a 70% chance that the Fed will keep the federal funds rate target at 5%-5.25%.

The single currency gained 0.56% against the greenback at 1.0748.

Despite improving inflation in Europe, markets still expect the ECB to hike rates in June and July, according to Refinitiv.

The president of the institution Christine Lagarde also stressed that inflation remained too high, making a further tightening of monetary policy necessary.


On the oil market, Brent gained 3.04% to 74.81 dollars a barrel and American light crude (West Texas Intermediate, WTI) 3.6% to 70.54 dollars.

(Laetitia Volga, edited by Jean-Stéphane Brosse)

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