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European stock markets recover ground encouraged by the US and Russia

At the open, the German DAX rose 1.12%, the London FTSE 100 added 1.06%, the French CAC 40 rose 1.10%, the Ibex 35 registered 1.28% and the FTSE Italian MIB up 1.21%. For its part, the Euro Stoxx 50 advanced 1.40% at 4,068.95. The interim agreement in the US Congress between Democrats and Republicans to avoid defaulting on public debt, and Russia’s offer to pump more natural gas to Europe.

The main stock indexes are recovering ground in the heat of two key news: the provisional agreement in the United States Congress between Democrats and Republicans to avoid default on public debt, and Russia’s offer to pump more natural gas to Europe.

At the opening of this Thursday, the German DAX rose 1.12% to 15,154.15, the London FTSE 100 added 1.06% over 7,069.80, the French CAC 40 rose 1.10% and It was placed at 6,564.70, the Ibex 35 scored 1.28% at 8,883 points and the Italian FTSE MIB rose 1.21% to 25,947.00. For its part, the Euro Stoxx 50 advanced 1.40% at 4,068.95.

In the case of the debt ceiling “thriller” , which has placed the US on the brink of the first default in its history, it may be temporarily postponed following the offer of the Republican leader of the Senate, Mitch McConnell, to suspend the limit. for two months, until next December 18, thus avoiding an unprecedented economic crisis. Democratic senators have shown their willingness to accept the Republican offer.

The Republicans in the Senate offered the Democrats to approve an increase in the debt limit, setting a specific figure, which lasts until December 2021. Although this offer, which seems to be accepted by the Democrats -the law could be voted on today in the Senate-, it is a new “kick” to follow in what refers to this issue, it will serve to calm investors for a while, allowing them to focus on the fundamentals of the market, both macroeconomic and business. Another thing This is what happens in December when Congress also has to face the problem of financing the federal government, which has funds until the 3rd of that month.

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On the other hand, a turn in gas prices in Europe after Russia made a move , after Russian President Vladimir Putin pledged to guarantee supply and thus help stabilize global energy markets. Russian gas giant Gazprom will send more gas through Ukraine than it is contracted for this year, based on the first nine months of supply, Putin said Wednesday at an energy meeting in Moscow, Bloomberg reports . Exports to Europe over the nine-month period have been close to a record and could reach an all-time high in 2021 if that pace is maintained, he remarked.

Yesterday the German factory orders for the month of August were published , a variable that contracted sharply, negatively surprising analysts. While it is true that during the months of June and July German factory orders had grown a lot, it is also true that no one expected this strong decline in the same in August, a decline largely caused by the bottlenecks that have been affecting supply chains, especially those of raw materials and intermediate goods.

Encouraged by a possible advance in the problem of the debt ceiling in the United States, Wall Street closed on Wednesday in positive territory: the DOW JONES rose 0.30%, while the selective S&P 500 rose 0.41% to 4,363 .55 and the Nasdaq, on which the main technology companies are listed, gained 0.47% to 14,501.91.

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But the underlying factor making markets nervous is the Federal Reserve’s monetary policy track record. In this case, will the Fed’s tapering start in December, or will it be delayed until 2022 along with the dot plot? Tomorrow’s US nonfarm payroll data should largely answer this question, with more than 500,000 jobs added, blocking the taper.

Tonight, weekly applications for unemployment benefits in the US will allow the non-agricultural forecasts for tomorrow to be readjusted at the last minute. Overnight, the ADP employment figure rose sharply to 568,000 jobs, well above forecasts.

Elsewhere, Asian equity markets started positive today after hopes of a compromise on the US debt ceiling caused Wall Street to sharply reverse its losses. The Nikkei 225 is up 0.95%, while the Kospi has jumped 1.55% today.

Mainland China remains closed until tomorrow, but Hong Kong is also rising strongly today, with Evergrande shares resuming . The news that the Hong Kong government will build 90,000 new homes has been received positively and the Hang Seng is up 2.15% today.

Petroleum

Russia’s offer to pump more natural gas to Europe, albeit with few details, was enough to send natural gas prices down 10% overnight, limiting potential oil gains. This was followed by official US crude inventory data, which showed a large increase of 3.25 million barrels. Inventories of heating oil, gasoline and distillates increased equally significantly, suggesting that US production is back on track after Hurricane Ida.

At the moment, Brent crude falls slightly 0.07% to $ 81.02, and WTI is down 0.66% to settle at $ 76.92 per barrel.

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In the cryptocurrency market, the increases do not stop for bitcoin, which adds 5.61% to reach 54,434.2 dollars.

On the EUR / USD price , the euro is trading at 1.1566 greenbacks.

Agenda of the day

On today’s macro agenda, the publication in Germany of industrial production for August and in the US of data on initial requests for unemployment benefits stands out , a variable that is a good approximation of the weekly unemployment rate in the country.

The European Central Bank (ECB) publishes the minutes of its monetary policy meeting. Today we will know the Minutes of the monetary policy meeting of the European Central Bank (ECB) , where inflation will capture all the eyes of investors, although they have already warned a few days ago both Christine Lagarde and Luis De Guindos that “inflation could continue to rise in the coming months ”, which would put equities in a tight spot.

On the other hand, it should be noted that yesterday the US payroll processor ADP released the private job creation figures in the US for the month of September, which far exceeded both the July and August figures, as expected by analysts. . Everything seems to indicate that the expiration of federal aid to the unemployed at the beginning of last September is already having a positive impact on the US labor market, which may also end up having it on inflation, since, if this trend is confirmed, The country’s labor market will relax, allowing companies to more easily fill the job vacancies they present.

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