European stock markets opened slightly higher on Thursday while awaiting decisions from several central banks, including that of England, still in and climate of distrust on the continent’s actions.
After a session generally in the red on Wednesday, the European indices started with a slight increase: Paris rose by 0.31%, London by 0.09%, Frankfurt by 0.47% and Milan by 0.38% around 9:10 a.m.
“French political risks remain relevant and many investors are hesitant to return to French and European stock indices as the legislative elections approach,” noted Ipek Ozkardeskaya, Swissquote analyst.
A sign of the tension, the gap between German and French rates widened again on Wednesday after the expected announcement that the European Commission has opened the way to a procedure for excessive public deficits against France. On Thursday, the gap between 10-year rates, the benchmark maturity, remained at a high level (3.21% for the French rate compared to 2.42% for the German).
However, the agenda is fuller on Thursday to keep investors busy. Several central banks, such as Norway and Switzerland, must make decisions on their key interest rate.
Despite British inflation returning to its target, the Bank of England (BoE) should not lower its key rate before the legislative elections called in the United Kingdom at the beginning of July, analysts believe.
Long the highest of the G7 countries, British inflation is now lower than that of the United States and the euro zone. But inflation in the services sector, slightly slowed to 5.7% year-on-year in May, compared to 5.9% the previous month, remains higher than economists’ expectations.
European consumer sentiment for June is also expected in end of session.
On Friday, the session will be devoted to the first elements on economic activity in June in the euro zone and the United States, with the publication of the PMI indices.
In Asia, the indices ended generally lower, without the momentum of technology stocks generally driven by Wall Street, which closed on Wednesday.
In China, investors were also cooled, particularly after the comments of the governor of the central bank who ruled out the idea of a major recovery plan to stimulate the world’s second largest economy.
Hong Kong fell by 0.61% in the latest trading, Shanghai by 0.41%, while in Japan, Tokyo gained 0.16%.. (With -)
