European markets ended the day lower on Tuesday, as investors were preoccupied by a number of events, from the French parliamentary elections to the latest monetary policy statements.

In Paris, the CAC 40 lost 0.58% to 7,662.3 points, while Germany's Dax fell by 0.89% and the UK's Footsie by 0.41%.

The EuroStoxx 50 index ended the session down 0.41%, compared with 0.27% for the FTSEurofirst 300 and 0.29% for the Stoxx 600.

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In France, the legislative elections remain the main concern for the markets, as the decision to dissolve the National Assembly triggered a sharp correction in French assets and a political risk premium persists.

In addition, the fall of Airbus and Merck on Tuesday weighed on the European indices, of which they are major constituents.

Investors are also preparing for the release of a series of data on price dynamics, starting on Friday with the publication of PCE inflation in the USA and French inflation.

Eurozone inflation will be published early next week.

These figures will be essential for gauging the trajectory of monetary policy: in the United States, restrictive statements by Federal Reserve officials follow one another, with the central bank constantly postponing the date of its first rate cut.

In the eurozone, doubts also persist as to the European Central Bank's next decisions, while the latest activity figures have surprised to the downside.

Nvidia's fall at the end of last week, which seems to be reversing on Tuesday, is also fuelling risk aversion, as the stock backed by the artificial intelligence theme was one of the main contributors to the performance of US equities in 2024.

ON WALL STREET

Wall Street is hesitating at mid-session, as while the Nasdaq is benefiting from Nvidia's rebound, political and monetary uncertainties are weighing on the indices.

At European closing time, trading on the New York Stock Exchange showed a 0.68% decline for the Dow Jones, compared with a 0.3% rise for the Standard & Poor's 500, and 1.08% for the Nasdaq Composite.

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VALUES

On Monday, Airbus lowered its total aircraft delivery target for 2024 and announced a 900 million euro charge in its first-half accounts, sending the stock down 9.52%, one of the worst performers on the Stoxx 600.

Safran shed 3.37% in the wake of Airbus, while engine manufacturers Rolls-Royce and MTU Aero Engines declined by 1.34% and 3.28% respectively.

On Tuesday, Eurofins denied allegations of financial malfeasance made against it by the hedge fund Muddy Waters, and gained 4.18%, one of the best performers on the Stoxx 600.

Trigano reported a 10.8% rise in third-quarter sales on Monday, citing sustained growth in motorhome sales, but shed 5.83%.

Richemont advanced 3.02% after Bloomberg reported that LVMH CEO Bernard Arnault had taken a personal stake in the Swiss luxury group.

Merck KGaA was down 5.9%, the German laboratory having announced the day before that a clinical trial involving a drug against head and neck cancer, hitherto considered promising, would be halted due to lack of efficacy.

Novo Nordisk gained 4.01% after announcing that its weight-loss drug Wegovy had been approved in China.

RATES

Yields in Europe fell moderately as investors sought safe assets to offset political uncertainty.

The German ten-year yield fell by 1 bp to 2.412%, while the two-year rate remained stable at 2.81%.

At the close of European fixed-income markets, the ten-year Treasury yield was unchanged at 4.2554%, while the two-year rate was up 1.9 bp at 4.753%.

CURRENCIES

The dollar rallied strongly, amid risk aversion and after restrictive monetary policy comments in the United States.

The dollar gained 0.21% against a basket of reference currencies, while the euro gave up 0.21% to $1.0709. Sterling was stable at $1.2678.

OIL

Crude oil fell back under pressure from the dollar, but the decline remained limited as markets bet on stronger-than-expected demand this year.

Brent crude declined by 0.27% to $85.78 a barrel, while US light crude (West Texas Intermediate, WTI) fell by 0.13% to $81.52.

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NEXT WEDNESDAY: (Written by Corentin Chappron)