Stocks rally in Europe ahead of US inflation

Stocks rally in Europe ahead of US inflation

The German DAX index on the Frankfurt Stock Exchange

The German DAX index on the Frankfurt Stock Exchange

by Claude Chendjou

PARIS (Reuters) – Wall Street is expected to rise on Thursday and European stock markets are also in the green mid-session, but the rally could be challenged by monthly U.S. inflation figures, while prospects for continuation of the rapid increase in interest rates was confirmed by the minutes of the last meeting of the US Federal Reserve (Fed).

New York index futures point to a Wall Street open with a 0.6% rise for the Dow Jones, 0.75% for the Standard & Poor’s 500 and 0.46% for the Nasdaq.

In Paris, the CAC 40 was up 0.68% at 5,857.86 at around 11:35 GMT. In Frankfurt, the Dax rises 1.24% and in London, the FTSE rises 0.11%.

The pan-European FTSEurofirst 300 index gained 0.19%, the euro zone’s EuroStoxx 50 0.63% and the Stoxx 600 0.57%.

Equity markets in Europe are on a technical rally after six straight sessions of decline in which the Stoxx 600 Index lost a total of 4.3% on fears of an escalation of the conflict in Ukraine, a looming economic downturn, turmoil in the UK bond market and expectations of further monetary tightening by major central banks.

After the figures considered disappointing the day before for producer prices in the United States, investors will take note of the US consumer price (CPI) data at 12:30 pm. The Reuters consensus sees a 0.2% increase in the CPI in a month and 8.1% in a year compared to an increase of 8.3% in August.

While the Fed’s “minutes” on Wednesday confirmed the US central bank’s determination to rein in price rises, money markets are widely pricing in a further 75 basis point rise in the cost of credit next month in the US. Joined.

In Germany, inflation was confirmed on Thursday with an increase of 10.9% year-on-year in September.

However, the Bank of England’s expected halt to emergency bond purchases on Friday and continued Russian bombardment of Ukraine could influence the rest of the trend.

WALL STREET VALUES TO FOLLOW

Delta Air Lines jumped 4% in premarket trading as the US carrier said it did not anticipate a slowdown in travel demand despite the risk of an economic downturn.

The world’s number one asset management firm BlackRock, on the other hand, fell 0.2% in the market preview after its quarterly profit fell.

Applied Materials, meanwhile, lost 1.15% in premarket trading after a warning linked to new US export restriction measures.

VALUES IN EUROPE

The technical upturn in Europe is mainly benefiting the transport and leisure segment (+3.94%), while the technological news segment (-1.05%) registers the largest drop, penalized especially by the warning from Applied Materials.

The American manufacturer of semiconductor equipment lowered its financial forecasts on Wednesday announcing that the impact of the new restrictions on exports to China decided by Washington would represent between 250 and 550 million dollars in two quarters.

Infineon falls 0.36%, ASML 2.55% and STMicroelectronics 0.06%.

Norwegian aluminum producer Norsk Hydro (+6.91%), on the other hand, is buoyed by media reports that Washington is considering restricting Russian aluminum imports.

Spectacular fall of the day, Monte dei Paschi di Siena (MPS) falls 24.19%. The Italian bank presented this Thursday the conditions of its capital increase scheduled for next week, which should allow it to raise up to 2,500 million euros of capital.

SPEED

The respite in equities translates into a pause in the rise in bond yields, which in previous sessions have reached multi-year highs.

The 10-year German Bund fell around five basis points to 2.287%.

CHANGES

The dollar fell 0.35% against a basket of benchmark currencies ahead of US inflation figures.

The euro took the opportunity to return to 0.9739 dollars (+0.36%).

Sterling was up 1.12% at $1.12225 on the eve of the Bank of England halting emergency purchases.

OIL

Oil prices remain broadly stable despite OPEC and the International Energy Agency (IEA) lowering demand forecasts.

Brent rose 0.22% to $92.65 a barrel and US light crude (West Texas Intermediate, WTI) rose 0.13% to $87.38.

(Written by Claude Chendjou, edited by Kate Entranger)

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