Euro markets continued to trade positively on Wednesday, reacting to the initial pressures that led to index losses in the morning, with investors, however, remaining cautious as they watch the rally of yields on government bonds on both sides of the Atlantic.
Yesterday’s jump in US yields led to heavy losses in the Wall Street indices, with investors preparing for the historic turn of the Federal Reserve to a more restrictive monetary policy this year as part of its effort to curb inflation. The 10-year yield in the US exceeded 1.87%, climbing to a two-year high, while the year had started close to 1.5%.
At the same time, in Europe, the performance in 10 years of Germany went above zero today for the first time since 2019 as investors expect the European Central Bank to gradually adjust its policy to deal with the inflation rally. Data released in December showed that Eurozone inflation hit a new record, climbing to 5%, which is expected to increase pressure on the ECB to take action.
On the board, the pan-European STOXX 600 index strengthens 0.7% to 483.08 points.
The German DAX rose 0.7% to 15,886.12 points, the French CAC 40 gained 0.9% to 7,195.20 points, while the British FTSE 100 gained 0.5% to 7,604.22 points after the data showed that inflation in the United Kingdom has soared to its highest level since 1992.
In particular, the consumer price index recorded an annual jump of 5.4% in December, as announced today by the British Statistical Office. Analysts’ average estimates put inflation at 5.2%.
In the periphery, the Italian FTSE MIB is moving with small gains of 0.2%, while the Spanish IBEX 35 is gaining 0.6%.
In the business developments, the title of the British Burberry marks a rally after the announcement of the luxury goods company that it expects to exceed the estimates for the profits after the strengthening of its sales in the third quarter of the fiscal year. The company’s shares jump 6% after the optimistic outlook.
The encouraging quarterly results of Bank of America and Morgan Stanley as well as the consumer product giant Procter & Gamble also contributed to the improvement of the climate.
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