Inflation Figures in Europe Impact Bond Rates and US Job Market Waiting on New Data

2023-08-30 11:46:07

Paris (awp/afp) – World stock markets are mixed on Wednesday, the latest inflation figures in Europe have pushed bond rates up and the United States is awaiting new figures from the American job market.

After opening slightly higher, the European stock market tipped half into the red following the first elements of inflation in Europe in August. Paris lost 0.33%, Frankfurt 0.34%, while Milan grabbed 0.14% and London 0.33% around 10:35 GMT.

In Spain, inflation accelerated once more to 2.6% over one year in August, following falling below the 2% mark in June.

The first estimate of inflation in Germany in August will be published at 12:00 GMT. The first figures published by the regional administrations seem to be mixed, with a decline of 0.2 percentage point to 5.9% in Bavaria, compared to July, once morest an increase of 0.1 point in North Rhine-Palatinate, at 5.9%.

“This has bolstered expectations of another rate hike from the European Central Bank next month,” said Finalto analyst Neil Wilson.

In response, bond interest rates are tending, that of the ten-year German government loan stood at 2.57% once morest 2.51% at the close on Tuesday.

Two-year maturities, the most sensitive to monetary policy expectations, also rose. The yield on German two-year debt was worth 3.08%, down from 3.03% on Tuesday.

Wall Street indices are heading for an open around equilibrium, according to their futures, the day following sharp gains following the publication of a drop in the number of job vacancies in the United States in July.

“Weak data (…) bolstered expectations of a break in September, and tipped the odds in favor of no hike in November as well,” Ipek said. Ozkardeskaya, analyst at Swissquote Bank.

Still on the US employment front, the ADP/Stanford Lab monthly report on job creation in the private sector for August is expected at 12:15 GMT, before the opening of Wall Street. Shortly following will also be published the second estimate of the GDP of the United States in the second quarter.

“If the data is in line with expectations, yesterday’s optimism will continue throughout the day,” said Ipek Ozkardeskaya.

“So, in the short term, we expect some divergence between central banks, with data indicating a pause (rate hikes, editor’s note) by the Federal Reserve and an ECB hike in September,” said Neil Wilson. .

Orsted in slow motion in the United States

Shares in Danish renewable energy company Orsted fell more than 20% in Copenhagen following reporting operating difficulties in the United States.

In its wake, RWE lost 3.88% in Frankfurt, Vestas 3.05% in Copenhagen, Voltalia 3.44% in Paris.

Gabon coup pushes oil up

Oil prices rose around 10:30 GMT, driven by the ongoing coup in Gabon, a producer country of the Organization of Petroleum Exporting Countries (OPEC).

The barrel of Brent from the North Sea took 0.73% to 86.11 dollars and that of American WTI 0.79% to 81.80 dollars.

The shares of groups present in Gabon also fell in reaction, like Eramet (-16.40% in Paris) and TotalEnergies EP Gabon (-14.59% in Paris).

The price of gas in Europe stabilized (-0.27% to 35.10 euros per megawatt hour), the day following the announcement of a strike at liquefied natural gas production sites in Australia from September 7.

The euro was stable once morest the dollar, at 1.0881 dollar for one euro.

Bitcoin stabilized (-0.57%) at 27,420 dollars, the day following its price soared following a court decision in the United States which might make cryptocurrency more accessible to investors and the general public.

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