European stock rises when Wall Street closes sharply

European stocks rose sharply on Thursday as traders weighed heavily on US currencies released in the previous quarter and minutes of a recent Federal Reserve meeting.

The Stoxx Europe 600 gauge closed 0.4 percent. Wednesday’s regional index jumped after closing the previous four trading days, down 1.3 percent on Tuesday. Various countries in the bloc last week launched new methods of coronavirus in response to a growing number of cases.

The German Dax index rose 0.2 percent, while the French CAC 40 rose 0.5%. London’s FTSE 100 index gained 0.3 percent.

Following the resumption of the epidemic ban in countries including Germany and the Netherlands, Goldman Sachs on Wednesday slightly lowered its prospects for growth in the euro area in the fourth quarter of this year by 0.2 percent to 0.8 percent. The bank lowered its forecast for the first quarter of 2022 by 0.3 percent to 0.6 percent.

“The decline is driven by expectations of new weaknesses in Covid’s activities, such as hospitality, arts and entertainment,” the bank said, adding that the potential for inflation could be small. “[We] look for bigger growth in Q2, where restrictions have been lifted, “he added.

In the US, the blue-chip S&P 500 index ended Wednesday to 0.2 percent, while the technically based Nasdaq Composite gauge closed 0.4 percent. The move follows new developments that show that US weekly unemployment rates have plummeted since 1969.

Some data suggest that a inflation rate closely followed by the Fed recording its biggest annual jump in October since the 1990s. Big spending on inflation showed an increase of 4.1 percent, in line with expectations of economists but from 3.7 percent in September.

Meanwhile, minutes of the Fed policy meeting in November show that officials have “insisted that staying flexible” is essential as the $ 120bn monthly procurement promotion program is being phased out.

Officials, who are expected to start raising prices as soon as possible, said the rise in prices could “take longer to subside than before”.

The U.S. stock market and the Treasury market closed on Thursday during the Thanksgiving holiday.

Tatjana Greil Castro, head of public markets at Muzinich & Co, said the Thanksgiving holiday is “an excuse for all markets too late” and that “everything we saw yesterday cannot be explained until tomorrow, therefore. We should see very little in terms of transportation”.

Responding to rising electricity and food prices, he said inflation would become “sticky” over time.

In European debt markets, yields over the 10-year German Bund fell by 0.25% on Thursday. Bond yields move irresponsibly towards their prices.

Although the Fed, the ECB and the Bank of England have not yet started raising prices, South Korea on Wednesday increased interest rates again in three months, following a announcement by the Reserve Bank of New Zealand earlier this week that it would tighten monetary policy. .

In currency, the dollar index – which measures the greenback against the other six currencies – fell by about 0.1%. The euro, which on Wednesday hit its lowest price against the dollar since June 2020, has also risen above $ 1.12.

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