The Palais Brogniard, former Paris Stock Exchange
by Claude Chendjou
PARIS (Archyde.com) – European stocks ended higher on Wednesday and Wall Street was also in the green mid-session, as falling bond yields following the Bank of England’s intervention took precedence over concerns related to a deterioration in the economic situation and the latest developments in the energy crisis in Europe.
In Paris, the CAC 40 ended with a gain of 0.19% to 5,765.01 points. Germany’s Dax advanced 0.36% and Britain’s Footsie gained 0.3%.
The EuroStoxx 50 index rose 0.2%, the FTSEurofirst 300 0.32% and the Stoxx 600 0.3%.
The Bank of England (BoE) announced on Wednesday that it would buy as many British bonds as needed over the next two weeks to stabilize financial markets, an emergency intervention decided after the fall in prices of government bonds and of the pound sterling caused by the presentation of the government’s budgetary projects.
The announcement sparked strong demand for benchmark sovereign bonds, driving their prices up and yields down after several uninterrupted bull runs that took the German 10-year Bund rate to an 11-year high and from its US equivalent to a 12½-year high.
“The Bank of England is restoring some calm to the markets. Finally, there is a central bank that is moving in the right direction,” commented Carlo Franchini, director of institutional clients at Banca Ifigest.
Gains in equity markets were, however, limited by statements from several European Central Bank (ECB) officials who forecast a further 75 basis point rise in the cost of credit in October, while on the inflation side, Leaks on the Nord Stream 1 and 2 gas pipelines in the Baltic Sea are reigniting new concerns, with Europe promising a “strong and united response” if sabotage is found.
VALUES IN EUROPE
On the Stoxx 600 the positive trend was driven by defensive sectors such as healthcare (+1.91%) and real estate (+3.55%), while on the other side of the spectrum banking (-2.31%) was one of the biggest declines.
Sanofi, carried by its forecasts on the effects of exchange rates, gained 1.63%, while the Swiss group Roche, up 4.11%, benefited from favorable announcements from Biogen and Eisai on their experimental treatment against the disease. of Alzheimer’s.
British luxury brand Burberry rose 5.46% after the announcement of the appointment of Daniel Lee as creative director, replacing Riccardo Tisci.
On the downside, European semiconductor groups STMicroelectronics (-2.56%), ASML (-0.51%), Infineon (-0.6%) and ASM International (-0.51%) suffered from a press report that Apple is giving up on increasing its iPhone production.
A WALL STREET
At the time of closing in Europe, the Dow Jones advanced by 1.2%, the Standard & Poor’s 500 by 1.33% and the Nasdaq by 1.29%.
The CBOE volatility index fell 3.80% to 31.36 points after hitting a session high since June 13 above 34 points.
All the main sectors of the S&P-500 are in the green, with the exception of new technologies, which gave up 0.12%.
Apple declined by 2.98%, the group having, according to the Bloomberg agency, given up on its plan to increase production of its new iPhones, expectations on demand not having materialized. Its suppliers Qualcomm yields 0.23%.
On the upside, Biogen soared 38.35% thanks to positive results on an experimental treatment for Alzheimer’s disease, dragging in its wake its competitor Eli Lilly, which took 8.75%.
THE INDICATORS OF THE DAY
Household confidence in France fell more sharply than expected in September according to INSEE, while the Gfk survey in Germany shows that consumer sentiment should fall further in October for the fourth consecutive month due to a high inflation and soaring energy costs.
CHANGES
At the close of European stock markets, the pound sterling, supported by announcements from the Bank of England, advanced 0.78% to 1.082 dollars. The British currency is however volatile with a peak in session at 1.084 dollar and a low at 1.0539 dollar, traders trying to digest the scope of the intervention of the BoE.
The dollar fell 0.57% after rising in session to a new 20-year high against a basket of benchmark currencies.
The euro, up 0.87%, is trading at $0.9675 but the latest developments in the gas crisis in Europe are limiting its gains.
RATE
Bond yields in Europe ended sharply lower: that of the ten-year German Bund fell more than 11 basis points to 2.140% and that of two years fell nearly 14 points to 1.851%.
The yield on the British 10-year Gilt fell nearly 50 basis points to 4.02%.
“We believe that the (BoE) purchases should and will last longer than the first two weeks (expected). This would restore market confidence,” ING analysts wrote in a note.
In the United States, the yield on ten-year US Treasury bonds also fell, by 19 basis points to 3.77%. The two-year-old gives up 17 points to 4.13%.
OIL
Oil prices rallied sharply in late trading in Europe on unexpected declines in US crude and fuel inventories, offsetting downward pressure from continued dollar strength.
The barrel of Brent gained 2.6% to 88.51 dollars a barrel and American light crude (West Texas Intermediate, WTI) 3.44% to 81.20 dollars.
TO BE FOLLOWED ON THURSDAY:
Publication at 12:30 GMT of the final US GDP in the second quarter
THE MARKET SITUATION:
(Some data may show a slight shift)
THE FENCE IN
EUROPE
Indices Last Var. Var. %YTD
Points
Eurofirst 300 1544,31 +5,25 +0,34% -18,30%
Eurostoxx 50 3335,30 +6,65 +0,20% -22,41%
CAC 40 5765,01 +11,19 +0,19% -19,40%
Dax 30 12183,28 +43,60 +0,36% -23,30%
FTSE 7005,39 +20,80 +0,30% -5,13%
SMI 10220,76 +94,33 +0,93% -20,62%
The values to follow
Paris and Europe:
[WATCH/LFR]
THE TREND TO
WALL STREET
Indices Last Var. Var. %YTD
Points
Dow Jones 29492,06 +357,07 +1,23% -18,84%
S&P-500 3696,07 +48,78 +1,34% -22,45%
Nasdaq 10968.02 +138.51 +1.28% -29.89%
Nasdaq 100 11410.07 +138.32 +1.23% -30.09%
Minutes of the meeting at
Wall Street : [.NFR]
“The Day Ahead” – Update on the
next session on Wall Street [DAY/US]
CHANGES
Standby Price Var.% YTD
Euro/Dlr 0.9690 0.9592 +1.02% +0.00%
Dlr/Yen 144.15 144.76 -0.42% +0.00%
Euro/Yen 139,69 138,91 +0,56% +7,21%
Dlr/CHF 0.9756 0.9913 -1.58% +6.95%
Euro/CHF 0,9455 0,9517 -0,65% -8,81%
Stg/Dlr 1,0842 1,0731 +1,03% +0,00%
Index $ 113.1970 114.1060 -0.80% + 17.70%
OR
Var. %YTD
Or Spot 1658,79 1628,80 +1,84% +9,35%
RATE
Last Where. Spread/Bound
(pts)
Future Bund 138,38 +1,24
Bund 10 ans 2,12 -0,02
Bund 2 ans 1,83 -0,02
OAT 10 ans 2,72 -0,04 +59,80
Treasury 10 ans 3,76 -0,20
Treasury 2 ans 4,13 -0,18
PETROLEUM
Previous Price Var. Var.% YTD
US light crude 81.33 78.50 +2.83 +3.61% +32.87%
Brent 88,53 86,27 +2,26 +2,62% +34,08%
(Written by Claude Chendjou, edited by Jean-Stéphane Brosse)