The stock markets ended up sharply, by 1.42% in Paris, 1.34% in Frankfurt and 1.37% in Milan, after jumping more than 2% earlier. In Zurich, the SMI rose by 0.93%.
Stock markets on Tuesday welcomed the slowdown in inflation in the United States in November, which reassures them on the eve of an announcement from the American central bank.
European stock markets ended up sharply, by 1.42% in Paris, 1.34% in Frankfurt and 1.37% in Milan, after jumping more than 2% earlier. London rose more modestly by 0.76%. In Zurich, the SMI gained 0.93%.
Wall Street indices were also slowing after a sharply higher opening. The Dow Jones rose by 0.25%, the S&P 500 by 0.83% and the Nasdaq, an index with strong technological coloring and very sensitive to interest rates, by 1.20%, around 4:55 p.m. GMT.
At the same time on the bond market, US debt rates fell sharply, to 3.49% for ten-year debt (against 3.61% on Monday) and to 4.21% for two-year bonds. (against 4.38% on Monday). This allowed shares in the technology sector to jump, as did bitcoin which rose 3.49%.
The dollar, for its part, is penalized by the prospect of less marked action by the American Federal Reserve (Fed) and has reached its lowest level since June against the euro and the pound. Around 4:55 p.m. GMT, it plunged 0.86% against the euro to 0.9409 euros for one dollar and 0.82% against the pound to 0.8085 pounds.
The US consumer price index (CPI) slowed to 7.1% in November year on year, from 7.7% in October. It is now at its lowest since December 2021.
Over one month, prices only increased by 0.1%, against 0.4% in October. Analysts were expecting 7.3% year on year and 0.2% month on month, according to MarketWatch consensus.
These figures are a boon for investors, as the US Federal Reserve began its monetary policy meeting on Tuesday. It is expected to raise rates by 0.50 percentage points on Wednesday, according to analysts’ forecasts, less than the last four hikes.
Markets seem to believe that the Fed’s fight against inflation “will only require a half-point hike tomorrow and a 0.25 point hike in February,” said Edward Moya, an analyst at Oanda.
“It remains to be seen whether this scenario will survive the first contact with Fed Chairman Jerome Powell tomorrow and the press conference following the meeting,” warns Michael Hewson, analyst at CMC Markets.
The trajectory of the CPI is however a non-negligible data for the Fed, adds Mr. Hewson. These figures could influence the increases that will be decided at the start of 2023. The key rate is currently just below 4%, whereas it was close to 0% at the start of the year.
Other central banks meet during the week, such as the European Central Bank and that of England on Thursday.
Headwinds in the air
The European leader in air transport, the German Lufthansa, announced on Tuesday that it was raising its forecasts for 2022, counting on an operating result (EBIT) of 1.5 billion euros, against “more than a billion” previously, thanks to an increase in passenger traffic. This is the second time in a few months that the group has revised its forecasts upwards.
The action rose 3.74% in Frankfurt and led the European sector such as IAG (+2.19% in London) and Frankfurt airport manager Fraport (+1.32%).
In the United States, United Airlines on Tuesday ordered 100 787 wide-body aircraft from Boeing (+ 1.04%) and optioned 100 additional aircraft, which represents the largest purchase of aircraft in this category ever made. by an American company. The airline’s stock lost 5.67%, while Boeing took 1.03%.
Favorable outlook for oil
Oil prices are also benefiting from the assumption that the Fed will slow its rate hikes, which could limit the extent of the recession looming over the global economy.
The price of a barrel of Brent from the North Sea for February delivery rose by 3.51% to 80.72 euros, that of American WTI for January delivery by 3.42% to 75.67 euros around 4:50 p.m. GMT.