Prudence in the euro zone, the BoE surprises, suspense on the Fed


© Reuters. THE MAIN EUROPEAN STOCK MARKETS END DOWN, EXCEPT LONDON

by Marc Angrand

PARIS (Reuters) – major stock markets of the euro zone have ended lower Thursday, while London has progressed in response to the announcements of the Bank of England and Wall Street hesitated, waiting to discover the name of the next chairman of the federal Reserve.

In Paris, the CAC 40 ended down 0.07% (3,79 points) to 5.510,50 points and in Frankfurt, the Dax has dropped 0.18 per cent. The index EuroStoxx 50 has yielded 0.23 percent, the FTSEurofirst 300 0.35% and the Stoxx 600 0,46%

In London, the FTSE 100 has gained 0.9 per cent, taking advantage of the more cautious tone than they expected to be employed by the Bank of England (BoE) after its first rate hike in 2007, which has led to a sharp decline of the pound sterling.

If the increase in the interest rate from the BoE was widely expected, the monetary policy Committee (MPC) – which has voted to increase by seven votes to two – surprised by emphasizing that the rise in rates would be “very gradual”.

The british currency has surrendered 1.38 percent against the dollar and 1.8% against the euro, its decline most marked vis-à-vis the single currency for 13 months. The yield of government bonds with a british (gilts) up to ten years, he returned to 1.26% as against 1,344% on Wednesday.

“The minutes of the meeting of the MPC and the tone of the press conference suggest that the MPC is confident in the merits of the rate increase, but this does not mean that he will hasten to do more,” said Howard Cunningham, manager bond in Newton, a subsidiary of BNY Mellon IM.

“There are two dissenters, and the forecasts do give that some further increases over the next two years. This is below expectations of the market, where the decline of sterling and the increase in gilts.”

THE PROJECT OF TAX REFORM in THE USA Does NOT YET HAVE NOTABLE IMPACT

Has Wall Street, investors have turned their gaze towards the white House, which is expected to announce at 19: 00 GMT the decision of Donald Trump on the estate of Janet Yellen to chair the Fed in February. The central bank governor Jerome Powell is still the major favourite.

The other big title of the day for the u.s. investors is the presentation of the draft outline for the tax reform that Donald Trump hopes to vote before the end of the month.

The text provides, among others, of reducing the rate of corporate tax from 35% to 20% and reduce the number of slices of the income tax.

But investors seem for the moment to be struggling to assess its impact and the probability of the see adopted by the state.

“Even if I think that there are a lot of potentially positive in the proposed tax, I don’t know if that comes out of concrete, Washington will be able to meet the expectations already incorporated by the market,” says Jake Dollarhide, ceo of Longbow Asset Management.

CREDIT SUISSE FEATURED, SANOFI SANCTIONED

Values in Europe, Credit Suisse (+4,48%) has used its quarterly results and statements of its leaders on their determination to counter the offensive of the fund activist RBR Capital Advisors in favour of a split.

Other value banking supported by its results, the Danish Danske Bank has made 2,76%. ING (AS of:INGA) has lost 0.72 per cent in spite of better than expected, with the title undergoing a profit-taking after a high of nine years.

Leading contributor to the growth of the FTSE 100 in London, Royal Dutch Shell (AS:RDSa) has taken to 3.16% after quarterly worn by its refining business and tried to be reassuring on the group’s ability to adapt to a world of oil prices permanently low.

In Paris, Sanofi (PA:SASY) has dropped 1.23 per cent and weighed on the CAC after adjusting its forecast turnover in the treatment of diabetes.

Outside of the stock market, the bitcoin has continued its surge to register a new record of over 7.300 dollars. It has more than doubled compared to its level in mid-September.

The oil, he remains torn between the increase of the production in the United States and the willingness of other major exporting countries to extend the agreement for management of the global supply. Brent is back under 60,50 dollars per barrel after the highest in more than two years of 61.70 dollars reached Wednesday.

(With Sruthi Shankar and Tanya Agrawal; edited by Wilfrid Exbrayat)

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