2023-12-14 17:19:39

* In Europe, the CAC 40 gained 0.59% and the Stoxx 600 0.93%

* Wall Street in the green at mid-session

*

Frankfurt displays a less accommodating tone than the Fed on rate cuts

December 14 (Archyde.com) – European stock markets ended higher on Thursday, with the exception of the German Dax, although the main indices reduced their gains following the European Central Bank (ECB), unlike the American Federal Reserve the day before, pushed back once morest expectations of an imminent interest rate cut.

In Paris, the CAC 40 ended with a gain of 0.59% to 7,575.85 points. The British Footsie gained 1.33% while the German Dax lost 0.08%.

The EuroStoxx 50 index gained 0.27%, the FTSEurofirst 300 0.68% and the Stoxx 600, following reaching a highest level in almost two years during the session, gained 0.93%.

The market mood changed during the day with the ECB meeting, which adopted a less dovish tone than the Fed on its monetary policy, while the US central bank signaled on Wednesday that it was nearing the end , otherwise had already completed its campaign to increase rates and that they should decrease next year.

Unsurprisingly, the ECB chose on Thursday to maintain its key rates at their current level, at 4.0%, following ten increases since July 2022 and a first pause in October. She once once more pushed back once morest hopes of an imminent drop in borrowing costs, reaffirming that they would remain at record levels despite a downward revision to her inflation forecast.

The president of the institution, Christine Lagarde, even clarified that no rate cut had been discussed during the central bank meeting.

“Lagarde pushed back the deadline (…) Remarks such as ‘we haven’t discussed rate cuts at all’ are a pretty clear signal that there will be no such measures in the first quarter ( 2024)”, commented Carsten Brzeski, analyst at ING.

In this week marked by the decisions of central bankers, the Bank of England (BoE), which opted for a new pause, also gave no indication on the potential timetable for its rate cuts, emphasizing that They are expected to remain high for “an extended period”, while the Norwegian Central Bank even made a surprise increase.

The Swiss National Bank (SNB) for its part once once more left its main key rate unchanged on Thursday, continuing the pause announced at its November meeting.

VALUES

European real estate soared by 5.67%, the best performance of the Stoxx 600 sectors, supported in particular by the Fed’s announcements the day before.

The German group Vonovia and the Swedish SBB took more than 7% and 15% respectively, and in Paris, Icade advanced by 5.7%, Nexity by 9.5% and Unibail Rodamco gained 5.5%.

In the rest of the sectors, Vivendi gained 9.9% following announcing that it was considering a split of its activities into three listed entities, while Air France-KLM climbed 8.9%, the airline having revised its increases its operating margin outlook for the period 2026-2028.

In Milan, the luxury group Brunello Cucinelli rose 6.8% following revising upwards its results forecast for the past year.

A WALL STREET

At closing time in Europe, the Dow Jones, which briefly crossed the historic level of 37,223 points on Thursday with hopes of an upcoming rate cut, gained 0.32%, the Standard & Poor’s 500 0.41 % and the Nasdaq Composite 0.32%.

TODAY’S INDICATORS

Economic indicators released Thursday point to a soft landing for the US economy, with retail sales in the United States recording an unexpected increase in November, while weekly jobless claims fell.

In France, INSEE lowered its growth forecast in 2023, now expecting an increase in gross domestic product (GDP) of 0.8% compared to 0.9% previously, while emphasizing that the country should escape a recession at the end of the year.

CHANGES

The dollar declines once morest the majority of currencies following the Fed meeting.

The greenback thus lost 1.01% once morest a basket of reference currencies

while the euro gained 1.13% to 1.0996 dollars.

The pound sterling increased by 1.2% to $1.2769.

RATE

Bond yields in the euro zone fell, while attenuating their decline, following the ECB meeting and the absence of a clear horizon on a reduction in borrowing costs.

The German ten-year yield lost more than 4 bps to 2.126%, and that of the two-year rate lost 9 bps to 2.564%.

The yield on ten-year Italian bonds ended at 3.812%, down more than 12 bp.

In the United Kingdom, the yield on ten-year gilts fell, under the effect of the BoE decision, with a loss of around 3 bps to 3.801%.

American bond markets fell amid hopes of an upcoming rate cut by the Fed. Ten-year US Treasury bonds

lost 12 bps to 3.9058%, and those at two years fell by around 14 bps to 4.3381%.

OIL

Oil prices rose sharply, supported by the Fed’s decision, which weakened the dollar, and by a larger than expected drop in oil stocks in the United States.

Brent rose 3.57% to $76.91 per barrel, with American light crude (West Texas Intermediate, WTI) increasing 3.77% to $72.09 CLc1.

TO BE CONTINUED FRIDAY:

(Some data may have a slight lag)

(Written by Diana Mandiá, edited by Jean Terzian)

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