Upturn in Europe in the wake of Wall Street

by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected on a slightly positive note on Thursday at the opening in the continuity of the previous day’s session, marked by the publication of monthly consumer prices in the United States, considered reassuring, while that another inflation indicator should be published during the day.

According to the first indications available, the Parisian CAC 40 should gain 0.16% at the opening, the Dax in Frankfurt 0.05% and the FTSE 100 in London 0.04%. The EuroStoxx 50 index is expected to rise by 0.09%.

Data released by the US Department of Labor on Wednesday showed consumer price inflation (CPI) in the US slowed in June to 3.0% year on year, the weakest pace in more than two years, while the “core” CPI index, excluding food and energy, decelerated to 4.8% over one year.

These data confirmed investors’ optimism that the US Federal Reserve (Fed) monetary tightening cycle would end soon.

This optimism will however be put to the test by the producer price (PPI) figures in the United States, due at 12:30 GMT.

Especially since the futures contracts still suggest with a probability of 94% a rate hike by the Fed of 25 basis points in two weeks. The probability of a further rise in the cost of credit in September nevertheless fell, from 22.3% to 13.2%, according to the FedWatch barometer of CME Group.

AT WALL STREET

The New York Stock Exchange ended higher on Wednesday, with the Nasdaq rising more than 1% as US consumer price inflation slowed.

The Dow Jones Industrial Average gained 0.25%, or 86.01 points, to 34,347.43 points.

The broader S&P-500 gained 32.90 points, or 0.74%, to 4,472.16 points.

The Nasdaq Composite advanced for its part by 158.26 points (1.15%) to 13,918.96 points.

Particularly sensitive to changes in interest rates, high-growth stocks recorded gains during the session and greatly contributed to the performance of the S&P-500. The technology sector gained 1.3%.

While several major US banks will kick off the unofficial earnings season this weekend, with expected higher sales figures for them, the S&P-500 banking index rose 0.6%. .

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index ended with a gain of 1.49% to 32,419.33 points and the wider Topix gained 0.97% to 2,242.99 points, the market having been driven by values ​​related to semiconductors.

The MSCI index comprising stocks from Asia and the Pacific (excluding Japan) rose by 1.8%, supported in particular by the Hang Seng in Hong Kong, which gained 1.6%.

In China, the SSE Composite of Shanghai is up 1.2% and the CSI 300 is up 1.36%, as Chinese Premier Li Qiang has urged technology companies to support a slowing economy, a sign that the tightening of the screws authorities in the sector is now complete.

Chinese macroeconomic indicators of the day, which show a 12.4% drop in exports and a 6.8% contraction in imports in June did not shake investors.

EXCHANGES/RATES

The dollar is stabilizing against a basket of benchmark currencies in the aftermath of its worst session since February, with the greenback falling more than 1% after the US inflation figures.

The euro is trading at $1.1139 (+0.1%) and hit a 15-month high of $1.1141 in early trading in Asia.

In the bond market, the yield on 10-year US Treasuries was flat at 3.8555% after a 12 basis point plunge on Wednesday. That of the German Bund of the same maturity is also almost unchanged, at 2.532%.

OIL

The oil market is supported by the slowdown in US inflation. It also benefited from higher Chinese crude imports in June, which reached 12.67 million barrels per day (bpd), a 45.3% year-on-year increase, according to customs data released Thursday.

Brent rose 0.25% to 80.31 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.17% to 75.88 dollars.

(Written by Claude Chendjou, edited by Jean-Stéphane Brosse)