European stock markets calm after US inflation and the ECB

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Faced with a surge of optimism from the ECB vis-à-vis growth in the euro zone and the maintenance of its monetary support, the European indices reacted differently: Paris (-0.26%) and Milan (-0, 40%) have declined. Frankfurt (-0.06%) and London (+ 0.10%) concluded close to equilibrium.

The New York Stock Exchange closed slightly higher, with the broader S&P 500 index concluding with a record high. The Dow Jones rallied 0.06%, the NASDAQ was up 0.78% and the S&P 500 was up 0.47%.

Sign of an economy which is recovering, consumer prices in the United States increased more than expected in May over one month (+ 0.6%) after rising 0.8% in April.

Excluding food and energy, the rise in consumer prices amounted to 3.8% in May over one year, the largest increase since June 1992. Over one year, they are up 5%, never before seen for 13 years.

This publication was eagerly awaited by the markets, which fear that an acceleration in inflation could lead to premature monetary tightening. But so far, the US Federal Reserve (Fed) has said it wants to keep rates low until full employment is restored.

Weekly claims for unemployment benefits in the United States continued to decline, with 376,000 new claims, but less than analysts hoped, suggesting that a return to normal in the labor market is not imminent.

“If the Fed is more concerned about the labor market and less about inflation, the acceleration of the rise in prices could nevertheless become less and less comfortable for it”, warn the experts of Aurel BGC.

In the euro zone, in order not to jeopardize the start of the recovery, the ECB’s Governing Council on Thursday maintained its accommodating monetary course, made up of interest rates at their historic low and massive debt purchases.

“But the discussion on the extent of the necessary monetary support will intensify in the weeks to come”, estimates Ulrike Kastens, economist at DWS, for whom the “beginning of the exit of the ultra-accommodative monetary policies should start with the autumn “.

The ECB raised its forecasts for consumer price hikes to 1.9% this year and 1.5% next year, while reiterating that it did not believe in a lasting price slippage, which would reassure consumers. markets.

“The markets accept inflation if the central banks keep the calm which M^me Lagarde (the President of the ECB, Editor’s note) demonstrated today, ”comments Jochen Stanzl, CMC Markets analyst.

The sovereign debt market remained calm after these announcements. Yields on ten-year Treasuries, which initially showed nervousness by rising to 1.51% before the price index was released, fell to 1.43%.

The broken down car

After Renault (-0.42% to 34.47 euros) and Volkswagen (-0.41% to 230.05 euros), Peugeot and Citroën were also indicted in France in the investigation into the fraud of pollution controls older generations of diesel engines. Their parent company Stellantis lost 1.31% to 17 euros.

In Frankfurt, the rest of the auto sector struggled with the current global shortage of electronic chips which is plaguing the sector: BMW (-1.85% to 92.85 euros), Daimler (-0.27% to 78.17 euros ) and Continental (-0.49% to 128.74 euros).

Altice invests in BT

BT took 6.55% to 195.15 pence after billionaire Patrick Drahi, boss of telecoms and media group Altice, announced it had acquired 12.1% of the capital of the British operator, becoming its largest shareholder.

On the oil, euro and bitcoin side

Oil prices retreated after hitting new highs on Thursday following OPEC’s release of an optimistic monthly report.

A barrel of Brent from the North Sea for August delivery ended at 72.52 dollars in London, down 0.42% from the previous day’s close.

In New York, a barrel of WTI for the month of July rose 0.47% to $ 70.29.

The euro remained stable (-0.07%) against the greenback, at 1.2172 dollar.

Bitcoin dropped 0.36% at $ 36,279.

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