PARIS (Reuters) – European stock markets ended higher on Friday and some posted new highs on the boost given by Wall Street, which is virtually ignoring new signs of accelerating inflation to favor the increase budgetary spending in sight in the United States.
In Paris, the CAC 40 gained 0.75% (48.4 points) to 6,484.11 points after a high of more than 20 years at 6,493.72.
In London, the FTSE 100 advanced 0.04% and in Frankfurt, the Dax gained 0.74%.
The EuroStoxx 50 index ended up 0.78%, the FTSEurofirst 300 0.59% and the Stoxx 600 0.57%, after posting a record high at 450.07.
At the time of closing in Europe, Wall Street was also moving in the green, the Dow Jones taking 0.33%, the Standard & Poor’s 500 0.29% and the Nasdaq Composite 0.44%.
US President Joe Biden was due to present his administration’s first federal budget during the day and markets expect him to confirm press reports that he intends to increase public spending to 6,000 billion dollars (4.918 billion euros), a prospect considered favorable to equities.
This factor outweighs concerns about inflation, despite new signs of an acceleration in the rise in consumer prices in the United States, since the “core PCE” index, the most closely watched by the Reserve federal; posted a 3.1% year-on-year increase in April, more than expected and well above the central bank’s 2% target.
Over the week as a whole, the Stoxx 600 gained 1.02% and the CAC 40 1.53%.
VALUES
The strongest sectoral gains of the day in Europe are for technology stocks, whose Stoxx index gained 1.25%, and financial services (+ 1.29%).
In London, banks have again benefited from statements by a Bank of England official on a possible rate hike from 2022, like HSBC, which took 1.13%.
In Paris, the biggest increase of the day within the SBF 120 is for Solutions 30 which rebounded by 15.92% but still shows a fall of more than 45% over the week.
TODAY’S INDICATORS
In the United States, Michigan’s confidence index fell to 82.9 from 88.3 in April according to the final results.
In Europe, INSEE revised down sharply the gross domestic product (GDP) of France in the first quarter, which now shows a contraction of 0.1% while the initial estimate gave it an increase of 0.4% .
CHANGES
The dollar continues to rebound against other major currencies (+ 0.09%) even if it only briefly amplified its advance after the figures of the US PCE index.
The greenback, up nearly 1% from the four-and-a-half-month low hit on Tuesday, is heading towards its best weekly performance since late April.
The euro fell to $ 1.2196 after a session low of 1.2133.
The yuan also hit a new three-year high.
In the cryptocurrency market, bitcoin lost 4.36% to 36,825.08.
RATE
The US government bond market barely reacted to the much-anticipated PCE index figures: the yield on ten-year treasury bills fell to 1.5892%, wiping out part of the increase caused by Thursday. budget information.
“The thesis of transitory inflation remains intact and this is the reason why the yields of Treasuries refuse to take off”, comments Edward Moya, analyst of Oanda.
On the European side, the multiple reassuring statements by officials of the European Central Bank (ECB) in recent days continue to favor the fall in yields: that of the ten-year German Bund ends the week at -0.183%, more than four points below its level last Friday, and the gap with the Italian yield has dropped back below 110 basis points.
OIL
The oil market remains close to its recent highs, with hopes of a recovery in demand continuing to outweigh the risk of a hypothetical return of Iranian crude to the world market to weigh on prices.
Brent gained 0.43% to $ 69.76 per barrel and US light crude (West Texas Intermediate, WTI) was stable at $ 66.85.
Both are expected to end the week up about 5%.
(French version Marc Angrand, edited by Jean-Michel Bélot)
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