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Global markets headed for a positive weekend after US inflation



(Paris) World stock markets took advantage of the announcement of a relaxation of several measures against COVID-19 in China on Friday, maintaining their optimism after the publication Thursday of a stronger than expected slowdown in US inflation.

The day after a euphoric session, where the NASDAQ soared by more than 7%, the New York Stock Exchange opened mixed. Around 9:45 a.m., the NASDAQ was up 0.45%, the S&P 500 was up 0.21%, while the Dow Jones was down 0.21%.

Most European indices also saw a moderate rise. Paris gained 0.46%, Frankfurt 0.52% and Milan 0.26%.

On the other hand, London fell for its part by 0.49%, while British GDP contracted by 0.2% in the third quarter, a sign that the economy may already be in recession.

The announcement of an easing of some measures against COVID-19 in China, including a reduction of the quarantine on arrival in the country from ten to eight days, boosted the markets.

The Hong Kong Stock Exchange took off by more than 7%: its main index includes many technology companies which benefited from the trend of the American markets the day before.

Thursday’s release of a sharper-than-expected slowdown in inflation (to 7.7%) in the United States in October sparked a frenzy of buy-equity orders, a slump in bond yields State and an ebb of the dollar.

“The reaction to this number seems a little extreme, even exaggerated, but it must be recognized that investors have waited a long time for this opportunity and that a lot of negativity has been priced in during this time,” comments Craig Erlam, analyst at Oanda.

With rising prices decelerating and a slowing economy, investors are hoping the US central bank eases off its monetary tightening cycle.

However on the bond market, European sovereign interest rates, which had collapsed the day before, rose to levels close to those where they were before the publication of inflation figures on Thursday. The German 10-year yield was worth 2.14%. The US market is closed for Veterans Day.

The European Commission has warned that Europe will enter a recession at the end of the year and suffer higher than expected inflation due to soaring energy prices.

Chinese tech keeps momentum

After jumps on Thursday, shares of Chinese technology companies listed on Wall Street continued to climb.

Alibaba took 2.32% in New York, Baidu 2.10%, JD. Com 8.80%, Tencent 5.27%.

On the side of currencies and oil

The dollar continued its decline on Friday, hitting a three-month low against the euro, as the year-on-year inflation slowdown in the United States, and the easing of China’s anti-COVID-19 policy undermined the attractiveness safe haven.

Around 9:40 a.m., the Dollar index, which compares the greenback to a basket of other major currencies, fell 1.10% to 107.03 points. Over two sessions, it plummets by 3.20%.

The American currency lost 0.75% against the euro at 1.0287 dollars.

The British pound fell against the euro by 0.66% to 87.73 pence, weighed down by the contraction of British GDP.

Investors were watching the possible implications of the troubles in the cryptocurrency sector. The FTX cryptocurrency platform, in turmoil for a week, declared bankruptcy, and its leader Sam Bankman-Fried resigned on Friday.

After this announcement, bitcoin fell 7.37% to $16,500.

Oil prices were supported by the easing of Chinese anti-COVID-19 restrictions.

Around 9:35 a.m., a barrel of Brent from the North Sea for delivery in January 2023 gained 2.97% to 96.46 dollars. A barrel of US West Texas Intermediate (WTI) for December delivery appreciated 3.02% to 89.13 dollars.

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