EUROPEAN STOCKMARKETS CLOSE, EXCEPT LONDON
by Laetitia Volga
PARIS (Reuters) – Major European stock markets, with the exception of London’s Footsie, ended down Tuesday on the eve of the important deadline represented by the release of US inflation with questions about the pace of the rise in the United States.
In Paris, the CAC 40 lost 0.53% to 6,490 points. Britain’s Footsie rose 0.08% and Germany’s Dax fell 1.12%.
The EuroStoxx 50 index fell 1.11%, the FTSEurofirst 300 0.47% and the Stoxx 600 0.67%.
Wall Street was also down at the close in Europe, ranging between -0.1% and -1.26% for the three major indices, with the Nasdaq particularly affected by disappointing forecasts from technology group Micron.
Major global indices are under pressure on the eve of the US monthly CPI release.
Better-than-expected data could strengthen the hypothesis that the US Federal Reserve will raise the interest rate target for the “Fed Funds”, the main instrument of its monetary policy, by 75 basis points at its September 20-21 meeting.
The consumer price index is expected to show an 8.7% year-on-year price increase, economists polled by Reuters said, slowing from the 9.1% recorded in June. However, excluding energy and food, 1-year inflation is expected at 6.1% versus 5.9% in June.
“Uncertainty and volatility will remain high as growth slows, corporate earnings are revised downwards, rate hikes are expected from major central banks and pressure on gas supplies in Europe is expected to increase this winter,” said Nick Brooks, head of economics and investment research at ICG.
The technology index Stoxx (-3.29%) recorded the largest decline of the day, weighed down by the warning from the American chipmaker Micron (-5.39%). STMicroelectronics ended the CAC 40 down 5.23%.
Contrary to the ranking, TotalEnergies gained 2.07% thanks to the rise in oil prices during the session. The Energy sub-fund gained 1.05%.
On the foreign exchange market, the dollar lost a small 0.21% against other international currencies. The euro rises to $1.0224.
Benchmark Treasury yields are rising as US jobs data continue to fuel prospects of another 75 basis point rate hike by the Fed.
The US 10-year Treasury yield rose three basis points to 2.7809%.
The 10-year German Bund closed at 0.9230%.
In the oil market, Brent and WTI erased gains after falling nearly 2% in the session following the announcement of a suspension of crude oil exports between Russia and certain Central European countries via the Druzhba pipeline.
(Written by Laetitia Volga, edited by Jean-Stéphane Brosse)