© Reuters. THE EUROPEAN MARKETS RISE SUBSTANTIALLY
by Marc Angrand
PARIS (Reuters) – The european markets are sharply higher at mid-session Friday, the formation of a government in Italy has rekindled the appetite for risk in this first session of the month of June, eclipsing the trade tensions and the censorship of the Spanish government.
Wall Street is currently expected in the green but the tendency of the opening could be influenced by the monthly employment figures in the United States, which will be published one hour before the bell.
In Paris, the CAC 40 gaining 1,22% to 5.464,48 points to 10: 40 am GMT. In Frankfurt, the Dax takes on 0,93 %, and in London, the FTSE 100 ahead of 0.67%. Index pan-european FTSEurofirst 300 was up 0.96%, the EuroStoxx 50 for the euro area of 1.39 per cent and the Stoxx europe 600 index of 0.97%.
The Milan stock Exchange, which has dropped from 9.15% for the whole month of may because of the political crisis, increased to 2.6%, its largest increase since the beginning of February, after the formation of a coalition government League-Movement 5 Stars (M5S) who must take an oath at 14: 00 GMT.
This precludes the risk of the convening of the new legislation, which would have maintained the instability without necessarily addressing the concerns of investors.
“From the point of view of the financial markets, we believe that the government that takes office today is likely to be slightly better than the one rejected last week by the president Mattarella,” says Barclays (LON:BARC).
“The decision to appoint a minister of Finance moderate should help to ease markets’ fears about the risk of a destabilization in the very short-term relationships between Italy and Europe. But we do not expect that the risk premium that has accumulated recently to completely disappear.”
In fact, if the performance of the borrowing of the Italian State ten years back not far from 2.5%, it remains significantly above its level of a month ago, under 1.8 per cent. Similarly, the two years, which was about -0,17% in early may, declined sharply since Tuesday, but still appears to 0.75%.
In Spain, the Ibex of Madrid stock Exchange takes to 1.85% after the adoption, without surprise by the Parliament of the censure motion filed against Mariano Rajoy, which allows the socialist Pedro Sanchez to succeed him to the post of president of the government.
On the foreign exchange market, the euro is rising against the dollar to 1,1709 and is moving towards its first performance weekly positive against the greenback after six weeks of consecutive decline.
DEUTSCHE BANK RETURNED TO THE FIELD, DIALOG SEMI FALLS, ELIOR MONTE
The greenback gave up a bit of ground against a basket of currencies of reference less than two hours of the publication of the monthly figures of the department of Labour. The consensus Reuters table on a resumption of job creation is to 188.000 in may after the 164,000 in April, on a stability of the unemployment rate to 3.9% and on an acceleration of the increase in wages of 0.2% from one month to the other and 2.7% year on year.
The current european political and agenda macroeconomic american dwarf very much the concerns related to the entry into force this Friday trade sanctions decided by Washington against steel, and aluminum imported in the United States, which should lead to reprisals, particularly from the european Union.
These tensions could further add to the slowing trend of the growth of manufacturing activity in Europe, have confirmed, unsurprisingly, the PMI manufacturing indices on the final of may.
The values of iron and steel, more exposed to the instant to u.s. sanctions, but nonetheless benefit from the general upward trend: ArcelorMittal (AS:MT) won 1,64%, ThyssenKrupp (DE:TKAG) 1,55%, Aperam (AI:APAM) is 2.32%.
The Italian banks monopolise the top of the highest increases in the Stoxx 600: BPER Banca leaps of 10,36%, Banco BPM 8,13%, UBI Banca of 7,03% and UniCredit 5.58%.
In Paris, Credit agricole (PA:CAGR) (+3,58%) and Axa (PA:AXAF) (+2,86%) are in the lead in the ACC.
Deutsche Bank (DE:DBKGn) will resume its side 3,76% following a drop of more than 7% and a record low closing. The group reiterated that its financial strength was not called into question after the decision of Standard & Poor’s to lower its rating from A – to BBB+.
Largest increase in the SBF 120 index paris, Elior (PA:ELIOR) enjoys a positive recommendation from Credit Suisse.
Has the drop, Dialog Semiconductor fall of 17,14% after warning on its annual turnover due to a decrease in orders from Apple (NASDAQ:AAPL), its first customer.
In its wake, AMS yield of 0.42%, while STMicroelectronics (PA:STM) grappille of 0.25%.
On the oil market, crude prices move in a narrow range, around 77,50 dollars / barrel for the Brent, but they are moving towards a second consecutive week of decline after the announcement of a new record u.s. production, which is now close to that of Russia.
(Edited by Wilfrid Exbrayat)