MARKETS IN EUROPE / Inflation and rising interest rates dampen sentiment | 01/07/22

FRANKFURT (Dow Jones) – After the weakness on the previous day, the European stock markets also went down at the end of the week. The continued rise in inflation in Europe made investors cautious. In addition, there was a development in the US labor market, which strengthens the tightening course of the US Federal Reserve. This indicates that interest rates are likely to rise further, which is particularly unfavorable for highly valued technology stocks. Financial stocks, on the other hand, are currently benefiting from the higher interest rates.

The DAX closed 0.6 percent lower at 15,948 points, for the Euro-Stoxx-50 it was down 0.4 percent to 4,306 points. After the recent significant losses, the Bunds fell once more, the yield on paper with a term of 10 years rose to minus 0.042 percent. This indicates that the return might soon turn into positive territory, which would then be the first time in almost three years.

Inflation in the EU rises to a record high

Contrary to expectations, the inflation rate in the euro zone rose further in December to 5.0 percent and the highest value since the beginning of monetary union. According to Helaba’s market strategists, this means that the ECB is still under pressure to take countermeasures, as they have long been on the way in the USA, for example.

Berenberg’s economists also believe that mounting price pressures will require a monetary policy response earlier than the current ECB outlook would suggest.

In the US labor market, wages have risen much faster than expected, while at the same time only regarding half as many jobs were created, although more jobs are open than ever before. According to Thomas Gitzel, VP Bank’s chief economist, this gap between the supply and demand for labor is what drives wages. This means there is a risk of a wage-price spiral. The bottom line is that the US Federal Reserve will not be pleased.

STMicro with better sales figures

On the stock market, banking and insurance stocks were ahead (+ 1% each), albeit with a clear gap to the daily winner of the commodity stocks (+ 1.9%). The fact that the Stoxx technology sub-index (-0.1%) also only closed slightly in the red was thanks to the STMicro share. It gained 6.6 percent following fourth-quarter sales surpassed both consensus estimates and company guidance, according to Citi’s assessment of the chipmaker’s preliminary numbers.

Aston Martin gained 6.6 percent. Aston Martin slightly missed its profit expectations for 2021, but because of delayed deliveries and not because of a lack of demand, it said.

According to key data for the fourth quarter, Shell prices rose 0.9 percent. According to the ING, the numbers fell short of market expectations. However, Shell confirmed the planned share buyback with a volume of 5.5 billion dollars. According to the ING, the price of Brent oil, which has risen to over $ 80 a barrel, might also have a supportive effect.

Internet shutdown in Kazakhstan weighs on Bitcoin

On the foreign exchange market, the euro rose sharply following the high inflation data from the euro zone. Bitcoin was last 2.9 percent lower at around $ 41,900. In addition to the declining willingness to take risks once morest the background of the interest rate prospects in the USA, the cryptocurrency was burdened by the fact that the internet was switched off there in response to the unrest in Kazakhstan. Kazakhstan is one of the centers of Bitcoin “mining”, as analyst Ipek Ozkardeskaya notes.

===

Index final development development development

stood in% since

Beginning of the year

Euro Stoxx-50 4,305.83 -18.98 -0.4% +0.2%

Stoxx-50 3.816,62 -6,38 -0,2% -0,1%

Stoxx-600 486,25 -1,91 -0,4% -0,3%

XETRA-DAX 15.947,74 -104,29 -0,6% +0,4%

FTSE-100 London 7.485,28 +34,91 +0,5% +0,9%

CAC-40 Paris 7,219.48 -30.18 -0.4% + 0.9%

AEX Amsterdam 788.43 +2.53 +0.3% -1.2%

ATHEX-20 Athen 2.181,19 +4,47 +0,2% +1,8%

BEL-20 Bruessel 4.306,37 -2,23 -0.1% -0.1%

BUX Budapest 51.956,74 +287,78 +0,6% +2,4%

OMXH-25 Helsinki 5,609.58 -85.56 -1.5% + 2.2%

ISE NAT. 30 Istanbul 2,256.55 +36.96 +1.7% +11.4%

OMXC-20 Copenhagen 1,744.09 -15.32 -0.9% -6.4%

PSI 20 Lisbon 5,595.94 +3.82 + 0.1% + 0.5%

IBEX-35 Madrid 8,751.80 -38.10 -0.4% + 0.4%

FTSE-MIB Mailand 27.618,47 -37,22 -0,1% +1,1%

RTS Moscow 0.00 0.00 0.0% -3.2%

OBX Oslo 1.077,59 +3,63 +0,3% +0,8%

PX Prague 1,427.02 -1.90 -0.1% + 0.1%

OMXS-30 Stockholm 2,400.95 -41.86 -1.7% -0.8%

WIG-20 Warsaw 2,311.93 +0.96 + 0.0% + 2.0%

ATX Vienna 3,971.97 +12.94 + 0.3% + 2.4%

SMI Zurich 12,797.94 +5.66 + 0.0% -0.6%

DEVICES last +/-% Fri, 8:20 Thu, 18:00% YTD

EUR/USD 1,1355 +0,5% 1,1303 1,1307 -0,1%

EUR/JPY 131,31 +0,3% 131,04 130,92 +0,3%

EUR/CHF 1,0439 +0,3% 1,0418 1,0399 +0,6%

EUR/GBP 0,8364 +0,2% 0,8346 0,8352 -0,5%

USD/JPY 115,65 -0,2% 115,94 115,78 +0,5%

GBP/USD 1,3577 +0,3% 1,3542 1,3539 +0,3%

USD/CNH (Offshore) 6,3839 -0,2% 6,3802 6,3933 +0,5%

Bitcoin

BTC/USD 41,969.83 -2.8% 41,377.44 42,899.19 -9.2%

ROHOEL zuletzt VT-Settl. +/- % +/- USD % YTD

WTI/Nymex 78,90 79,46 -0,7% -0,56 +4,9%

Brent/ICE 81,61 81,99 -0,5% -0,38 +4,7%

METALS last previous day +/-% +/- USD% YTD

Gold (Spot) 1.792,87 1.790,00 +0,2% +2,87 -2,0%

Silver (spot) 22.25 22.20 + 0.2% +0.05 -4.6%

Platinum (Spot) 959.00 971.28 -1.3% -12.28 -1.2%

Kupfer-Future 4,39 4,35 +0,9% +0,04 -1,6%

===

Contact the author: [email protected]

DJG / thl / gos

(END) Dow Jones Newswires

January 07, 2022 12:19 ET (17:19 GMT)