European stock markets ended slightly higher on Wednesday, as investors tried to digest the latest data on inflation in the United States, which showed a slowdown in March but remained high, in order to determine whether an imminent halt to interest rate hikes could be envisaged.

In Paris, the CAC 40 ended up 0.09% at 7,396.94 points, after hitting a new all-time high of 7,431.87 during the session.

The British Footsie gained 0.5% and the German Dax 0.31%.

The EuroStoxx 50 index ended with a gain of 0.02%, the FTSEurofirst 300 0.13% and the Stoxx 600 also 0.13%.

The markets, which experienced some volatility at the end of the session, initially welcomed the US inflation figures published in the early afternoon, which showed a stronger-than-expected slowdown in prices in March, while remaining well above the Federal Reserve's (Fed) 2% target.

US consumer prices rose by 0.1% last month after +0.4% in February, while economists polled by Reuters were forecasting a month-on-month increase of 0.2%. Year-on-year, inflation stands at 5%, more than twice the Fed's target.

"I'm waiting for inflation to crack (...) It's moving in the right direction (...) but in the absence of a month, two months or three months in which inflation reaches our target, it's hard to say that we're necessarily heading towards that target," tempered Richmond Fed President Thomas Barkin in an interview with CNBC.

For his part, ECB Vice-President Luis de Guindos warned that underlying inflation in the eurozone was proving difficult to control, while concerns about energy prices have shifted to "core" prices, which continue to rise.

VALUES

In Paris, LVMH ended with a loss of 0.4% before the publication, after the close, of its quarterly results, which showed a 17% rise in sales thanks to the rebound in China.

For its part, L'Oréal gave up 1.1% after Deutsche Bank lowered its recommendation on the stock to "hold" from "buy".

Scor gained 2.8% after the presentation of its annual targets under IFRS 17.

Elsewhere in Europe, Swedish truck manufacturer AB Volvo jumped 7.3% on the back of record first-quarter profits.

German laboratory Merck plunged by 7.3%, as the Food and Drug Administration (FDA) suspended the admission of new patients for treatment with the multiple sclerosis drug evobrutinib, due to suspected liver damage caused by the molecule.

A WALL STREET

At the time of closing in Europe, the Dow Jones was up 0.21%, the Standard & Poor's 500 0.15%, and the Nasdaq 0.09%, as investors calmly digested inflation data.

FOREIGN EXCHANGE

The "dollar index", which measures variations in the greenback against a basket of currencies, fell sharply after the publication of the US inflation data, dropping by 0.67%, while the euro took advantage of the situation to rise by 0.75% to $1.0992.

RATES

Eurozone bond yields rose on Wednesday despite the slowdown in US inflation in March, with analysts pointing to "hawkish" comments by Robert Holzmann, governor of the Austrian central bank.

He told a German newspaper that the ECB should continue to raise interest rates and that a further 50 basis point hike in May was justified.

The ten-year German Bund rate rose by more than seven basis points to 2.372%, while the two-year rate gained more than seven basis points to 2.794%.

In the United States, the 10-year US yield was stable at 3.4318%, while the 2-year fell slightly to 4.007%.

OIL

Oil prices rose sharply on Wednesday after inflation data from the USA, the world's largest oil consumer, amid optimism that the Fed's rate hike cycle will soon come to a halt.

The weakening dollar also benefited crude prices.

Brent crude advanced by 1.35% to $86.77 a barrel, while US light crude (West Texas Intermediate, WTI) gained 1.35% to $82.63.

(Written by Diana Mandiá, edited by Blandine Hénault)

by Diana Mandia