European markets ended the trading session on Thursday mostly into the green territory, although the growth of most leading indexes was diminished as weaker-than-expected data on the US economy gave investors more reasons to believe that the Federal Reserve would cut interest rates on the upcoming meets in July.
The pan-European Stoxx 600 added nearly 0.1% to its value, with the telecoms sector advanced by 0.8%, while household consumption shrank by 0.9%.
In turn, the German DAX indicator rose by 0.12% to 12,631.22 points. A minimum increase of 0.01% was reported by the French benchmark CAC 40, which reached 5,619.19 points.
On the red territory was only the British index FTSE 100, which wiped out 0.1%, ending the session at 7,602.40 points.
The stock exchanges in the US are closed for Independence Day, but on Wednesday Dow Jones Industrial Average and Nasdaq Composite ended with gains to historical amid the expectations for interest rate cuts by the Federal Reserve by the end of July.
“Today’s Stock Market is the highest in the history of our great Country! This is the 104th time since the Election of 2016 that we have reached a NEW HIGH. Congratulations USA!”, commented Donald Trump on the record high values of Wall Street indexes.
The release on Friday of US non-farm payroll figures is key, analysts say, with a weak reading likely to reinforce expectations of a rate cut.
Talk of a reduction and concerns about the economy have seen the yield on safe haven 10-year Treasuries fall below 2%.
Investors continue to monitor closely the events of the trade front, where White House Economic Advisor Larry Kudlow said earlier this week that talks between Washington and Beijing will be resumed next week.
Meanwhile, tensions between Washington and Tehran continue to escalate, as US President Donald Trump attacked Iran on Twitter. His comment was made after Iranian President Hassan Rouhani announced that the country is increasing uranium enrichment.
“Iran has just issued a New Warning. Rouhani says that they will Enrich Uranium to any amount we want if there is no new Nuclear Deal. Be careful with the threats, Iran. They can come back to bite you like nobody has been bitten before!”, said Donald Trump.
Again in Europe, Italy managed to avoid a disciplinary procedure by the EU against its excessive debt after the authorities in Rome managed to convince the European Commission that the measures they had taken would help to reduce the country’s debt.
The nomination of the International Monetary Fund’s chief, Christine Lagarde, to become the next president of the European Central Bank also fueled positive sentiment. The European Council’s support of Lagarde, who has praised the willingness of the ECB’s current president, Mario Draghi, to intervene in markets, raised traders’ hopes of lower interest rates as well.
Read more at https://www.wnd.com/2019/07/european-stocks-jump-traders-bet-on-loose-fed-policy/#vuBElqr6Cc74EbEG.99
Core European bonds climbed, with German 10-year yields sliding below the European Central Bank’s deposit rate for the first time.
Corporate stocks performance
The shares of Italian banks Unicredit and Ubi Banca rose by 5% and 5.6%, respectively.
Remaining in the banking sector, Reuters reported earlier that German Deutsche Bank is preparing 5 billion USD in redundancy in the coming days, with the largest burden on its investment banking business. Shares of the creditor rose by 1%.
On the flip side were the stocks of Coca-Cola, traded on London Stock Exchange, which fell by nearly 6.8%.