Stocks rise and dollar falls after Fed ‘minutes’ – 11/24/2022 1:28 PM


The Euronext stock exchange in the business district of La Defense in Paris, France

PARIS (Reuters) – European stocks traded at a three-month high mid-session on Thursday, benefiting from relief from the minutes of the U.S. Federal Reserve’s latest meeting, which raised hopes of a slowdown in the rise in interest rate.

Their progress is made in limited volumes in the absence of most American investors, the day being a holiday in the United States for the Thanksgiving holiday.

In Paris, the CAC 40 gained 0.6% to 6719.03 points around 12:00 GMT, confirming its return to its April levels. In London, the FTSE 100 takes 0.15% and in Frankfurt, the Dax advances by 0.96%.

The EuroStoxx 50 index is up 0.61%, the FTSEurofirst 300 0.4% and the Stoxx 600 0.54%, the highest since mid-August.

Ahead of the Thanksgiving break, Wall Street, which will only reopen for half a session on Friday, praised the Fed’s “minutes” on Wednesday showing a clear majority of FOMC members believe it will “probably soon” be timely. to slow the rise in interest rates.

The MSCI world index, which includes 47 developed and emerging markets, thus reached its highest level since mid-September.

“The Fed should be content to raise rates by 50 basis points in December and then by 25 points from its first meeting next year,” said Niels Christensen, chief analyst at Nordea.

European investors found additional support in better-than-expected figures from Germany’s Ifo business climate index.

They will be watching at 12:30 GMT for the minutes of the October meeting of the European Central Bank (ECB).

VALUES IN EUROPE

Almost all of the sectors on the European stock exchange are evolving in the green and among the best performances are found both real estate (+2.47%), which benefits from the decline in bond yields, and cyclical compartments such as the media ( +0.84%).

Leading the CAC 40, the shopping center operator Unibail-Rodamco-Westfield gained 2.76%.

Down, Rémy Cointreau lost 1.29% despite half-year results above expectations, the spirits group remaining cautious on the Chinese market.

Among the average values, Elior and Derichebourg respectively take 10.86% and 7.02% after having confirmed discussing the possibility of an alliance.

RATES The prospect of a slowdown in the rise in US rates, which pushed down Treasuries yields on Wednesday, has an even more marked impact on European benchmark yields: that of the ten-year German Bund fell 10 points to 1.815 %, at its lowest for six weeks, just like the two-year, which amounts to 2.044%.

EXCHANGES The dollar retreated for the third session in a row against the other major currencies (-0.19%), a movement favored both by the Fed’s report and by the absence of many American forex traders.

The euro moderated its progress against the greenback at 1.0404 (+0.09%) pending the ECB’s report, after a peak at 1.0448.

The pound sterling is at its highest for almost three months against the dollar at 1.2124 (+0.60%).

OIL

The oil market remains trending lower and close to recent two-month lows, with the prospect of Russian crude price capping well above its cost of extraction reassuring traders of the risk of tight supply world.

Brent fell 0.73% to 84.79 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.27% to 77.73 dollars. Both had fallen more than 3% on Wednesday in response to reports that the G7 could cap the price paid for Russian crude between 65 and 70 dollars a barrel, while its cost price is estimated around 20 dollars.

(Written by Marc Angrand)

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