European markets supported by US consumer confidence

Frankfurt closed down 0.74%, Paris 0.14% and London 0.47%. Milan lost 0.49% on the last exchanges and Zurich returned 0.24%.

Global equity markets rose on Friday, helped by the rebound in US consumer confidence in August, reassuring news that comes on top of encouraging inflation numbers.

New York indices were largely in the green around 15:50 GMT. The Dow Jones lost 0.61%, the S&P 500 0.84% ​​and the Nasdaq 1.13%, driven in particular by tech megacaps like Alphabet (+0.96%), Tesla (+2.69%), Apple (+1.39%). .

European markets closed slightly higher: Frankfurt gained 0.74%, Paris 0.14% and London 0.47%. Milan lost 0.49% in the last exchanges. In Zurich, the SMI lost 0.24%.

“The resilience of US markets may help here, as falling inflation is dampening expectations that the Fed’s rate-hiking policy will be as aggressive as expected,” said Michael Hewson, analyst at CMC Markets.

Consumer confidence rebounded more-than-expected in August in the United States on the improving outlook on the inflation front, which is providing relief for low-income households, according to the preliminary estimate released on Friday by the University of Michigan. Consumer confidence hit an all-time low in June.

Earlier in the week it was announced that the PPI index of wholesale prices in the United States fell by 0.5% in July from June, confirming the trend given by the announcement of a slowdown in US inflation by at least 8.5% over a year in July.

The markets still seem to be counting on the US Federal Reserve (Fed) easing interest rate hikes once these figures are published.

But “it’s a risk because it’s not necessarily what the Fed is saying through the voice of its members, but also during recent meetings,” notes Andrea Tuéni, an analyst at Saxo Bank.

“These data are incapable of persuading the Fed to change course, even if they ease some of the pressure on the economy,” said Craig Erlam, an analyst at Oanda.

The Federal Reserve has hiked several rates in recent months and has no intention of stopping anytime soon, aiming to bring inflation back to around 2%, a far cry from July’s 8.5%.

On the European side, “it seems difficult to imagine a fall in inflation, since energy prices there are much more expensive than in the United States,” Michael Hewson agrees.

On the oil and gas side

The Dutch TTF, the benchmark for natural gas in Europe, was hovering around 205 euros per megawatt hour (MWh) around 15:50 GMT on Friday. It’s up almost 190% since the beginning of the year as a result of the Russian invasion of Ukraine.

Oil prices fell on Friday. North Sea Brent Crude for October delivery fell 136% to $98.25 a barrel. A barrel of US West Texas Intermediate (WTI) for delivery in September fell 2.02% to $92.40.

Increased health

British pharma giant GSK (+3.57%) and its now independent former healthcare arm Haleon (+2.18%) rebounded from their previous day’s plunges after discussing on Friday the legal risks surrounding a drug Zantac, which is taking off was withdrawn from the market in 2019. used for heartburn.

It was manufactured and marketed by several labs, including GlaxoSmithKline (GSK) and France’s Sanofi (+0.84%), which also fell on Thursday.

America’s Pfizer rose 2.70% after also suffering losses on Thursday.

On the currency side

The euro lost ground against the dollar on Friday as analysts fear the euro zone could slide into recession amid the gas crisis.

As of 15:50 GMT, the euro was down 0.62% at $1.0257.

Bitcoin lost 0.85% to $24,010.

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