Traders work at the headquarters of stock exchange operator Euronext
by Laetitia Volga
PARIS (Archyde.com) – European stock markets ended the session higher on Friday after the highly anticipated publication of monthly employment figures in the United States, which in the eyes of some investors confirm the scenario of a moderate rise in interest rates. Federal Reserve next month.
In Paris, the CAC 40 gained 1.47% (99.45 points) to 6,860.95 points, the highest since February 23. The British Footsie, which has peaked for three and a half years, gained 0.87% and the German Dax gained 1.2%.
The EuroStoxx 50 index advanced by 1.47%, the FTSEurofirst 300 by 1.1% and the Stoxx 600 by 1.16%.
In the first week of the year, the CAC 40 gained 5.98%, its strongest weekly increase since November 2020, and the Stoxx 600 gained 4.6%, its best performance since last March.
On Wall Street, the three main indices were up around 1.85% at the close in Europe.
The Labor Department announced that the US economy had created slightly more jobs than expected last month, with the unemployment rate down to 3.5%, but investors mainly seem to be holding the slowdown a little more marked than expected. expected from the increase in the average hourly wage.
The latter increased by 0.3% against +0.4% in November, bringing its rise over one year to 4.6%, after 4.8%. The Archyde.com consensus was for an increase of 5.0% year-on-year and 0.4% month-on-month.
In the eyes of some observers, this element could provide arguments for the Fed to contain the extent of the tightening of its monetary policy: the futures contracts on the rates of the federal funds, reflecting investors’ expectations in this area, reflect a probability 77% from a rise of just a quarter point on February 1.
“While job growth remains strong, details from the report make us more confident of a sharp market slowdown in the months ahead. rate hikes to 25 basis points at the next meeting, but it is far too early to consider a pause in the tightening cycle,” said Michael Feroli at JPMorgan.
RATES/EXCHANGES
The employment figures in the United States and the fall in the inflation rate in the euro zone to 9.2% favored the drop in bond yields: that of the ten-year German Bund, at 2.209%, ended at its lowest level since December 20 and that of US Treasuries of the same maturity fell about 15 basis points to 3.582%.
The dollar lost 0.85% against a basket of six other currencies and the euro took advantage of this to rise to more than 1.06.
VALUES
All European sectors ended the session in the green. That of technology, down in the morning, gained 1.78% with the sharp decline in bond yields.
On the results side, Sodexo fell 1.20% despite a turnover in the first quarter of its 2023 financial year that exceeded expectations.
THE INDICATORS OF THE DAY
Adding to the series of good indicators published this week, retail sales in Germany rose more than expected in November and the economic sentiment index in the euro zone improved in December for a second consecutive month.
OIL
The decline of the greenback benefits the oil market where the barrel of Brent gains 1.14% to 79.59 dollars and that of American light crude (West Texas Intermediate, WTI) 1.34% to 74.66 dollars.
(Laetitia Volga, edited by Bertrand Boucey)