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European markets reassured about inflation



(Paris) Stock markets rose on Wednesday, helped by a decline in bond rates and reassured in Europe by the slowdown in inflation in France and Germany.

The European markets chained a third consecutive session of increase: Paris gained 2.23%, Frankfurt 2.01%, Madrid 1.71%, Milan 1.88% and London 0.39% around 9:35 a.m. (Eastern time). Is).

Wall Street was more cautious, the Dow Jones gained 0.46%, the S&P 500 0.70% and the NASDAQ 0.80%.

Earlier, Hong Kong jumped more than 3%, buoyed by tech stocks and buoyed by the prospect of new fiscal measures to support the Chinese economy, including that “Beijing has reportedly considered extending support for real estate developers,” according to Pierre Veyret, analyst at ActivTrades.

The wave of optimism, which has been sweeping across Europe since the start of the year, took shape thanks to the decline in bond yields and natural gas prices, combined with the easing of inflation in Germany and France in December.

French inflation slowed more than expected in December, to 5.9% over one year, against 6.2% in November, according to the provisional estimate published by INSEE on Wednesday. A good surprise after the announcement the day before of a German inflation rate reduced below 10% for the first time since August in Europe’s largest economy.

For Craig Erlam, an analyst at Oanda, investors anticipate “that central banks will be forced to cut rates sooner than expected in order to support the economy” and foresee “a drop in inflation faster than expected”.

Bond rates fell sharply: the French yield on the 10-year bond fell to 2.81%, a sharp decline from 3.09% on Friday at the close, a record for 10 years. The US 10-year rate also fell, to 3.68%, around 9:35 a.m. (Eastern time).

Mr. Erlam adds that the upward revisions of the PMI activity indices for Germany, France, Italy, Spain and the euro zone are rather encouraging elements.

The minutes of the last meeting of the monetary policy committee of the American central bank (Fed), expected after the close of the European markets, will give new grains to grind for the investors whose monetary policies are the main concern.

New dismissal in American tech

The American IT group Salesforce has announced that it will be separating around 10% of its employees, or just under 8,000 jobs, and closing several offices. Its stock jumped 3.77% on Wall Street.

In the technology sector, sensitive to financing conditions, Meta (+2.30%), HP (+2.24%) and Lyft (+0.90%) also progressed and are among the companies to have reduced their workforce.

Apple (+1.68%) and Tesla (+3.08%) also rose, rebounding from losses recorded the day before.

Oil, gas and the dollar down

Oil prices continued to slide on Wednesday as concerns over China’s health situation intensified as the world’s second-largest economy is in the grip of a major wave of COVID-19.

Around 9:30 am (Eastern time), a barrel of Brent from the North Sea for delivery in March, lost 2.62%, to 79.95 dollars. Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in February, also fell by 2.55%, to 74.97 dollars.

The benchmark contract for European natural gas, the Dutch TTF for delivery in February, continued to decline (-7.34%) to 67 euros per megawatt hour, the lowest since the outbreak of war in Ukraine at the end of February.

The dollar on Wednesday lost its gains from the previous day against the pound and the euro, the safe haven suffering from the market’s appetite for risk after inflation in France and before the Fed minutes.

Around 9:30 a.m. (Eastern time), the greenback lost 0.57% to 1.0609 dollars for one euro and 0.61% to 1.2042 dollars for one pound.

Gold, traditionally considered a safe haven, took advantage of the weaker dollar and rose 1% to 1857 dollars an ounce, after rising to 1865.12 dollars, a high since June.

Bitcoin, considered a risky asset, also rose 0.90% to $16,811.

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