by Laetitia Volga
PARIS (Reuters) – Major European stock markets, except for London, ended slightly lower on Thursday as Wall Street widened its losses, as further evidence of tension in the U.S. labor market heightened fears that interest rates could rise. interest from the Federal Reserve (Fed) to be raised to a high level for longer than expected.
In Paris, the CAC 40 lost 0.22% to 6,761.5 points. Britain’s Footsie, supported by commodity stocks, gained 0.76% and Germany’s Dax fell 0.38%.
The EuroStoxx 50 index ended down 0.36%, the FTSEurofirst 300 0.11% and the Stoxx 600 lost 0.15%.
At the time of the close in Europe, Wall Street amplified its decline, the Dow Jones, the Standard & Poor’s 500 and the Nasdaq Composite lost around 1.2%.
The number of jobless claims fell to a three-month low last week while, according to the firm’s survey ADPthe private sector created more jobs than expected in December, further evidence that the US labor market remains tight despite the Fed’s sharp rate hikes to rein in demand.
“The market wants to see more unemployment to get the Fed to stop its rate hikes. The report ADP was bad from that point of view but good from an economic point of view,” said Thomas Hayes, chairman of Great Hill Capital.
Traders are now more split on the odds of a 25 and 50 basis point rate hike in February, according to the Fedwatch Barometer, but they continue to see rates peak at just over 5% in June.
Investors are waiting for the monthly report from the US Department of Labor on Friday to get a more precise and reliable idea of the state of the job market.
VALUES
Among the strongest sectoral gains in Europe, the Stoxx commodity index gained 1.95%. Metal prices, especially copper, are benefiting from news of new investment in China, particularly in public works.
A Paris, ArcelorMittal finished top of the CAC 40 with a gain of 3.10% while in London, Glencore took 1.46% and Anglo American more than 4%.
In business news, Interparfums gained 4.48% after revising its full-year outlook upwards.
Ryanair gained 6.11% after raising its annual profit target and fashion chain Next jumped 6.89% after announcing quarterly sales that beat expectations.
RATES/EXCHANGES
With the prospect of a still firm Fed, bond yields rise: that on ten-year Treasuries gains nearly three basis points to 3.7275%.
Kansas City Fed President Esther George’s comments on the need to raise and maintain the federal funds rate target above 5% “for some time” are helping to boost yields on US government bonds. Treasury, according to analysts.
The German ten ended the day at 2.308%, moving away from the two-week low reached the day before, at 2.264%, following the good inflation figures in Germany and France.
On the foreign exchange market, the dollar appreciated by 0.87% against a basket of reference currencies and theeuro touched a session low since December 12 at 1.0513 dollars.
OIL
After two sessions in the red and with the decline of the dollar, the oil market is on the rise again: the barrel of Brent takes 1.77% to 79.22 dollars and that of American light crude (West Texas Intermediate, WTI) gained 1.83% to $74.17.
(Laetitia Volga, edited by Blandine Hénault)
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