European markets traded higher at mid-session on renewed expectations of a Federal Reserve rate cut in September following US inflation figures. Madrid’s IBEX gained 0.9%, Frankfurt’s DAX rose 0.65%, Milan’s FTSE MIB advanced 0.6%, Paris’ CAC 40 climbed 0.5%, and London’s FTSE 100 added 0.2%. US futures also trended upwards ahead of weekly mortgage applications and EIA crude inventory data.
Oil prices declined (WTI -0.57% to $62.81/barrel) after the American Petroleum Institute reported an unexpected 1.5-million-barrel stock build, signaling weakened demand. Natural gas rose 0.6% to €32.6/MWh, while gold dipped 0.11% to $3,362/oz. The dollar weakened to €0.8536 and 73.66 pence.
The Italy-Germany 10-year bond yield spread tightened to 77.4 basis points, with Italian yields down 5.3 bps to 3.47% and German yields falling 4.1 bps to 2.7%.
Chipmakers showed mixed results: STM fell 1% while ASML gained 1.1%. Automakers diverged with Stellantis down 1.45% and Ferrari up 0.4%. Luxury stocks advanced, led by Christian Dior (+1.3%), LVMH (+1.15%), and Kering (+0.9%), while Moncler edged up 0.26%. Banking shares surged, highlighted by Popolare Sondrio (+3.29%) and BPER (+2.46% after securing 80% control post-takeover bid). Intesa (+1.35%), MPS (+1.3%), Sabadell (+1.15%), and Banco BPM (+0.9%) also gained, while Commerzbank (+0.44%) and Unicredit (flat) were muted. Energy stocks lagged: TotalEnergies (-1.52%), BP (-1.4%), Shell (-0.55%), and Eni (-0.4%).
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