Paris (awp/afp) – European stock markets fell on Tuesday, with inflation data in the euro zone not convincing enough to change the mood of the markets, weighed down by political risk in France.
The Paris Stock Exchange was down 0.94% at around 11:15 GMT. It has almost given back all of its early-session rebound on Monday, when it climbed as much as 2.8% in early trading.
After the first round of legislative elections on Sunday, more than 185 candidates withdrew, according to AFP findings, reducing the likelihood that the National Rally will obtain an absolute majority.
“It is too early to answer most of the questions raised by these elections,” said Donny Kranson, manager at Vontobel.
Frankfurt also lost 1.14% and London 0.43%.
Inflation fell slightly in June in the eurozone, to 2.5% over a year, but not enough to convince the European Central Bank (ECB) to accelerate the reduction of its interest rates in the face of sluggish growth.
Core inflation – that is, adjusted for volatile energy and food prices -, the most closely watched by financial markets and the ECB, remained stable at 2.9%, according to the European statistics office. The consensus of analysts anticipated a slight decline to 2.8%.
“We will not rest until the game is won and inflation is back to 2%,” central bank President Christine Lagarde warned Monday at the institution’s annual forum in Sintra, Portugal. “Our work is not done and we must remain vigilant,” she added.
Christine Lagarde is due to speak again on Tuesday during a meeting with Jerome Powell, the chairman of the American central bank.
On Wall Street, indices are expected to fall between 0.3% and 0.5% at the opening according to futures contracts.
U.S. investors are awaiting the first of the U.S. employment data in June, the Job Vacancies (JOLTS).
Further data will be released throughout the week, but the main event will be the official monthly report on Friday.
In Asia, the trend was more positive: Tokyo gained 1.12%, Hong Kong 0.29% and Shanghai 0.08%.
Sainsbury’s disappoints
Sainsbury’s was down 1.72% in London after reporting a rise in quarterly sales but disappointing the market with a decline in sales at its Argos subsidiary.
New CEO at Cartier
Luxury giant Richemont (+0.39%) is organizing the succession at the head of the jewelry house Cartier by entrusting the reins from September 1 to Louis Ferla, who distinguished himself through the success of the watch brand Vacheron Constantin.
Calm on rates
On the bond market, after a sharp rise in recent sessions, government interest rates were stabilizing in Europe and the United States.
The rate of the French 10-year loan was at 3.36% at around 11:00 GMT, slightly different from the German rate (2.61%), the reference in Europe. The American rate was at 4.50%.
On the currency side, the single European currency fell 0.22% against the greenback, to 1.0716 dollars for one euro, completely erasing its rebound from Monday.
Oil prices were supported on Tuesday by the continuing conflict in the Middle East and the risk of supply disruptions linked to hurricanes.
At around 11:00 GMT, the price of a barrel of North Sea Brent crude for delivery in September rose 0.75% to $87.25 and its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in August, rose 0.78% to $84.03.
Bitcoin fell 1.01% to $62,590.
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